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

Zacks Equity Research
·3 min read

Fortinet (FTNT) closed the most recent trading day at $148.02, moving +0.33% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.13%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.15%.

Heading into today, shares of the network security company had gained 20.3% over the past month, outpacing the Computer and Technology sector's gain of 4.54% and the S&P 500's gain of 2.59% in that time.

FTNT will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.96, up 26.32% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $721.82 million, up 17.48% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.25 per share and revenue of $2.57 billion. These totals would mark changes of +31.58% and +19.05%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for FTNT. 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.

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, 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 has moved 0.18% higher. FTNT is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that FTNT has a Forward P/E ratio of 45.37 right now. Its industry sports an average Forward P/E of 49.62, so we one might conclude that FTNT is trading at a discount comparatively.

Investors should also note that FTNT has a PEG ratio of 3.18 right now. 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. The Security industry currently had an average PEG ratio of 2.76 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 230, putting it in the bottom 10% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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