NasdaqGS:FTNT

Stock Analysis Report

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Executive Summary

Fortinet, Inc. provides broad, integrated, and automated cybersecurity solutions worldwide.


Snowflake Analysis

Flawless balance sheet with acceptable track record.


Similar Companies

Share Price & News

How has Fortinet's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FTNT's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.9%

FTNT

2.8%

US Software

1.6%

US Market


1 Year Return

75.6%

FTNT

35.2%

US Software

4.8%

US Market

Return vs Industry: FTNT exceeded the US Software industry which returned 35.2% over the past year.

Return vs Market: FTNT exceeded the US Market which returned 4.8% over the past year.


Shareholder returns

FTNTIndustryMarket
7 Day1.9%2.8%1.6%
30 Day-3.8%9.3%2.3%
90 Day36.5%42.2%29.5%
1 Year75.6%75.6%36.2%35.2%7.1%4.8%
3 Year264.5%264.5%157.8%148.9%37.1%28.1%
5 Year234.6%234.6%249.2%228.6%67.2%48.6%

Price Volatility Vs. Market

How volatile is Fortinet's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Fortinet undervalued compared to its fair value and its price relative to the market?

14.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FTNT ($138.44) is trading below our estimate of fair value ($162.3)

Significantly Below Fair Value: FTNT is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: FTNT is poor value based on its PE Ratio (63.7x) compared to the Software industry average (53.6x).

PE vs Market: FTNT is poor value based on its PE Ratio (63.7x) compared to the US market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: FTNT is poor value based on its PEG Ratio (5.1x)


Price to Book Ratio

PB vs Industry: FTNT is overvalued based on its PB Ratio (42x) compared to the US Software industry average (6.5x).


Next Steps

Future Growth

How is Fortinet forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

12.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FTNT's forecast earnings growth (12.4% per year) is above the savings rate (2.2%).

Earnings vs Market: FTNT's earnings (12.4% per year) are forecast to grow slower than the US market (22.8% per year).

High Growth Earnings: FTNT's earnings are forecast to grow, but not significantly.

Revenue vs Market: FTNT's revenue (13.1% per year) is forecast to grow faster than the US market (9.3% per year).

High Growth Revenue: FTNT's revenue (13.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FTNT's Return on Equity is forecast to be very high in 3 years time (52%).


Next Steps

Past Performance

How has Fortinet performed over the past 5 years?

64.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FTNT has high quality earnings.

Growing Profit Margin: FTNT's current net profit margins (16.4%) are lower than last year (18.6%).


Past Earnings Growth Analysis

Earnings Trend: FTNT's earnings have grown significantly by 64.4% per year over the past 5 years.

Accelerating Growth: FTNT's earnings growth over the past year (6.3%) is below its 5-year average (64.4% per year).

Earnings vs Industry: FTNT earnings growth over the past year (6.3%) underperformed the Software industry 7.9%.


Return on Equity

High ROE: FTNT's Return on Equity (69.3%) is considered outstanding.


Next Steps

Financial Health

How is Fortinet's financial position?


Financial Position Analysis

Short Term Liabilities: FTNT's short term assets ($2.0B) exceed its short term liabilities ($1.5B).

Long Term Liabilities: FTNT's short term assets ($2.0B) exceed its long term liabilities ($1.1B).


Debt to Equity History and Analysis

Debt Level: FTNT is debt free.

Reducing Debt: FTNT has not had any debt for past 5 years.

Debt Coverage: FTNT has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: FTNT has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Fortinet current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate FTNT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate FTNT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FTNT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FTNT's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FTNT's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Ken Xie (57yo)

19.75yrs

Tenure

US$9,629,923

Compensation

Mr. Ken Xie founded Fortinet Inc., October 2000 and has been its Chief Executive Officer and Director since October 2000. Mr. Xie serves as an Advisor at WI Harper Group. He is a Strategic Advisor at Forge ...


CEO Compensation Analysis

Compensation vs Market: Ken's total compensation ($USD9.63M) is about average for companies of similar size in the US market ($USD11.50M).

Compensation vs Earnings: Ken's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ken Xie
Founder19.75yrsUS$9.63m7.76% $1.7b
Michael Xie
Founder19.42yrsUS$4.29m7.24% $1.6b
Keith Jensen
CFO & Chief Accounting Officer2.42yrsUS$3.39m0.0016% $364.8k
John Whittle
Executive VP of Corporate Development & Strategic Alliances13.75yrsUS$2.51m0.00079% $176.8k
Ana Pease
Vice President of Talent Management & Operations0.50yrno datano data
Peter Salkowski
Vice President of Investor Relations2.42yrsno datano data
Patrice Perche
Senior Executive Vice President of Worldwide Sales & Support4.5yrsno datano data
John Maddison
Chief Marketing Officer & Executive VP of Products1.5yrsno datano data
Chris Perna
Vice President of Talent Acquisition0.50yrno datano data
Sandra Wheatley
Senior Vice President of Marketing1.5yrsno datano data

2.4yrs

Average Tenure

54yo

Average Age

Experienced Management: FTNT's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ken Xie
Founder19.75yrsUS$9.63m7.76% $1.7b
Michael Xie
Founder19.42yrsUS$4.29m7.24% $1.6b
William Neukom
Lead Independent Director2.25yrsUS$337.06k0.033% $7.4m
Christopher Paisley
Independent Director16.42yrsUS$342.74k0.047% $10.6m
Ming Hsieh
Independent Director7.25yrsUS$330.50k0.0042% $948.9k
Judith Sim
Independent Director5.08yrsUS$333.28k0.015% $3.4m
Jean Hu
Independent Director0.75yrUS$225.10kno data
Kelly Ducourty
Independent Director0.25yrno data0.00026% $58.2k

6.2yrs

Average Tenure

57yo

Average Age

Experienced Board: FTNT's board of directors are considered experienced (6.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Fortinet, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fortinet, Inc.
  • Ticker: FTNT
  • Exchange: NasdaqGS
  • Founded: 2000
  • Industry: Systems Software
  • Sector: Software
  • Market Cap: US$22.379b
  • Shares outstanding: 161.65m
  • Website: https://www.fortinet.com

Number of Employees


Location

  • Fortinet, Inc.
  • 899 Kifer Road
  • Sunnyvale
  • California
  • 94086
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FTNTNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDNov 2009
FO8DB (Deutsche Boerse AG)YesCommon StockDEEURNov 2009
0IR9LSE (London Stock Exchange)YesCommon StockGBUSDNov 2009
FTNT *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNNov 2009
F1TN34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

Fortinet, Inc. provides broad, integrated, and automated cybersecurity solutions worldwide. It offers FortiGate hardware and software licenses that provide various security and networking functions, including firewall, intrusion prevention, anti-malware, virtual private network, application control, Web filtering, anti-spam, and wide area network (WAN) acceleration. The company also provides FortiSwitch product family that offers secure switching solutions for connecting customers end devices; FortiAP product family, which provides secure wireless networking solutions; FortiExtender appliance provides a WAN connection to its FortiGate products; FortiAnalyzer product family, which offers centralized network logging, analyzing, and reporting solutions; and FortiManager product family that provides central and scalable management solution for its FortiGate products. It offers FortiWeb product family provides web application firewall solutions; FortiMail product family that secure email gateway solutions; FortiSandbox technology that delivers proactive detection and mitigation services; and FortiSIEM family of software solutions, which offers a cloud-ready security information and event management solutions, as well as FortiToken and FortiAuthenticator product families for multi-factor authentication to safeguard systems, assets, and data; and FortiNAC product family to implement zero trust network access strategies. The company provides security subscription, technical support, professional, and training services. It sells its security solutions to channel partners and directly to various customers in telecommunications, technology, government, financial services, education, retail, manufacturing, and healthcare industries. Fortinet, Inc. provides its products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 2000 and is headquartered in Sunnyvale, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/02 23:52
End of Day Share Price2020/07/02 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.