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Fortinet (FTNT) Gains As Market Dips: What You Should Know

Zacks Equity Research

Fortinet (FTNT) closed the most recent trading day at $79.31, moving +0.19% from the previous trading session. This change outpaced the S&P 500's 0.14% loss on the day. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq lost 0.1%.

Coming into today, shares of the network security company had gained 1.01% in the past month. In that same time, the Computer and Technology sector lost 0.36%, while the S&P 500 lost 0.91%.

Investors will be hoping for strength from FTNT as it approaches its next earnings release, which is expected to be October 31, 2019. The company is expected to report EPS of $0.56, up 27.27% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $532.96 million, up 17.42% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.25 per share and revenue of $2.11 billion, which would represent changes of +22.28% and +17.3%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for FTNT. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.12% lower. FTNT is currently a Zacks Rank #3 (Hold).

In terms of valuation, FTNT is currently trading at a Forward P/E ratio of 35.21. This represents a discount compared to its industry's average Forward P/E of 37.81.

We can also see that FTNT currently has a PEG ratio of 2.51. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Security industry currently had an average PEG ratio of 2.34 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 204, putting it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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