Now trading at a price of $60.55, Fortinet has moved -0.1% so far today.
Fortinet returned gains of 25.2% last year, with its stock price reaching a high of $81.24 and a low of $44.12. Over the same period, the stock outperformed the S&P 500 index by 3.6%. More recently, the company's 50-day average price was $55.16. Fortinet, Inc. provides cybersecurity and networking solutions worldwide. Based in Sunnyvale, CA, the large-cap Technology company has 13,618 full time employees. Fortinet has not offered a dividend during the last year.
The Company Enjoys Exceptional EPS Growth:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $1,127 | $2,163 | $2,594 | $3,342 | $4,417 | $5,173 |
| Revenue Growth | n/a | 91.96% | 19.94% | 28.82% | 32.17% | 17.1% |
| Operating Margins | 21% | 16% | 20% | 19% | 22% | 23% |
| Net Margins | 30% | 15% | 19% | 18% | 19% | 22% |
| Net Income (MM) | $335 | $332 | $488 | $607 | $857 | $1,151 |
| Net Interest Expense (MM) | -$7 | -$8 | -$8 | $15 | $18 | $20 |
| Depreciation & Amort. (MM) | $56 | $62 | $69 | $84 | $104 | $110 |
| Earnings Per Share | $0.38 | $0.38 | $0.58 | $0.73 | $1.06 | $1.45 |
| EPS Growth | n/a | 0.0% | 52.63% | 25.86% | 45.21% | 36.79% |
| Diluted Shares (MM) | 871 | 875 | 838 | 835 | 805 | 791 |
| Free Cash Flow (MM) | $586 | $716 | $958 | $1,204 | $1,449 | $2,272 |
| Current Ratio | 1.77 | 1.9 | 1.5 | 1.55 | 1.24 | 1.3 |
Fortinet has growing revenues and no capital expenditures and exceptional EPS growth. Additionally, the company's financial statements display positive cash flows and healthy leverage. Furthermore, Fortinet has average net margins with a stable trend and just enough current assets to cover current liabilities.
Fortinet's Valuation Is in Line With Its Sector Averages:
Fortinet has a trailing twelve month P/E ratio of 38.3, compared to an average of 35.0 for the Technology sector. Based on its EPS guidance of $1.67, the company has a forward P/E ratio of 33.0. Fortinet's PEG ratio is 3.66 on the basis of the 10.5% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, Fortinet is likely overvalued compared to the book value of its equity, since its P/B ratio of 637.37 is higher than the sector average of 7.92. The company's shares are currently trading 3360.0% above their Graham number. Ultimately, Fortinet's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Fortinet Has an Average Rating of Buy:
The 36 analysts following Fortinet have set target prices ranging from $49.0 to $78.9 per share, for an average of $59.83 with a buy rating. As of April 2023, the company is trading -7.8% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Fortinet has an average amount of shares sold short because 2.0% of the company's shares are sold short. Institutions own 71.2% of the company's shares, and the insider ownership rate stands at 17.45%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $4,107,861,688.
