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

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Fortinet (FTNT) closed at $269.23 in the latest trading session, marking a +1.03% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.38%. Elsewhere, the Dow lost 0.5%, while the tech-heavy Nasdaq lost 0.5%.

Coming into today, shares of the network security company had lost 3.3% in the past month. In that same time, the Computer and Technology sector lost 8.38%, while the S&P 500 lost 6.69%.

Investors will be hoping for strength from Fortinet as it approaches its next earnings release. On that day, Fortinet is projected to report earnings of $1.09 per share, which would represent year-over-year growth of 14.74%. Meanwhile, our latest consensus estimate is calling for revenue of $1.03 billion, up 28.08% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.09 per share and revenue of $4.38 billion. These totals would mark changes of +27.57% and +31.06%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Fortinet. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.1% lower within the past month. Fortinet is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Fortinet is currently trading at a Forward P/E ratio of 52.37. Its industry sports an average Forward P/E of 45.31, so we one might conclude that Fortinet is trading at a premium comparatively.

We can also see that FTNT currently has a PEG ratio of 2.91. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. FTNT's industry had an average PEG ratio of 2.6 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 34% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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