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Fortinet (FTNT) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
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Fortinet (FTNT) closed the most recent trading day at $84.51, moving +1.5% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.37%. Meanwhile, the Dow gained 0.25%, and the Nasdaq, a tech-heavy index, added 0.34%.

Heading into today, shares of the network security company had gained 0.08% over the past month, lagging the Computer and Technology sector's gain of 4.35% and the S&P 500's gain of 1.83% in that time.

Wall Street will be looking for positivity from FTNT as it approaches its next earnings report date. In that report, analysts expect FTNT to post earnings of $0.39 per share. This would mark year-over-year growth of 18.18%. Meanwhile, our latest consensus estimate is calling for revenue of $471.57 million, up 18.19% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.07 per share and revenue of $2.08 billion. These totals would mark changes of +12.5% and +15.69%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for FTNT. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. FTNT is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, FTNT currently has a Forward P/E ratio of 40.13. This represents a discount compared to its industry's average Forward P/E of 45.47.

Investors should also note that FTNT has a PEG ratio of 2.4 right now. 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 2.49 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 17, putting it in the top 7% 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.

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


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