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Fortinet (FTNT) Gains But Lags Market: What You Should Know

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In the latest trading session, Fortinet (FTNT) closed at $59.65, marking a +0.42% move from the previous day. The stock lagged the S&P 500's daily gain of 1.42%. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, lost 0.07%.

Heading into today, shares of the network security company had gained 4.98% over the past month, lagging the Computer and Technology sector's gain of 6.64% and the S&P 500's gain of 6.69% in that time.

Investors will be hoping for strength from Fortinet as it approaches its next earnings release, which is expected to be August 3, 2022. In that report, analysts expect Fortinet to post earnings of $0.22 per share. This would mark year-over-year growth of 15.79%. Our most recent consensus estimate is calling for quarterly revenue of $1.03 billion, up 28% from the year-ago period.

FTNT's full-year Zacks Consensus Estimates are calling for earnings of $1.02 per share and revenue of $4.38 billion. These results would represent year-over-year changes of +27.5% and +31.01%, respectively.

It is also important to note the recent changes to analyst estimates for Fortinet. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.12% higher within the past month. Fortinet is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Fortinet has a Forward P/E ratio of 58.33 right now. This represents a no noticeable deviation compared to its industry's average Forward P/E of 58.33.

We can also see that FTNT currently has a PEG ratio of 3.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Security was holding an average PEG ratio of 2.82 at yesterday's closing price.

The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 28% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow FTNT in the coming trading sessions, be sure to utilize Zacks.com.


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