Will Fortinet Inc’s (NASDAQ:FTNT) Earnings Grow In The Next Couple Of Years?
Fortinet Inc’s (NASDAQ:FTNT) latest earnings announcement in December 2017 showed that the company experienced a slight headwind with earnings declining from US$32.19M to US$31.40M, a change of -2.45%. Investors may find it useful to understand how market analysts view Fortinet’s earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. See our latest analysis for Fortinet
Market analysts’ consensus outlook for this coming year seems optimistic, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally generating US$259.16M in 2021.
Although it’s informative understanding the growth rate each year relative to today’s level, it may be more insightful to estimate the rate at which the earnings are moving on average every year. The benefit of this approach is that we can get a better picture of the direction of Fortinet’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 47.81%. This means, we can assume Fortinet will grow its earnings by 47.81% every year for the next few years.
Next Steps:
For Fortinet, I’ve compiled three important aspects you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is FTNT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FTNT is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FTNT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
