NasdaqGS:FTNT

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Outstanding track record with flawless balance sheet.


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


Market Performance


7 Day Return

-3.3%

FTNT

-3.2%

US Software

0.4%

US Market


1 Year Return

-5.7%

FTNT

20.3%

US Software

6.9%

US Market

Return vs Industry: FTNT underperformed the US Software industry which returned 20.3% over the past year.

Return vs Market: FTNT underperformed the US Market which returned 6.9% over the past year.


Shareholder returns

FTNTIndustryMarket
7 Day-3.3%-3.2%0.4%
30 Day-2.1%-3.7%-1.1%
90 Day-12.6%-6.1%-0.5%
1 Year-5.7%-5.7%22.0%20.3%9.3%6.9%
3 Year140.7%140.7%112.1%103.8%45.8%36.4%
5 Year197.5%197.5%163.1%144.1%62.9%45.1%

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?

27.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: FTNT ($76.56) is trading below our estimate of fair value ($106.13)

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


Price To Earnings Ratio

PE vs Industry: FTNT is good value based on its PE Ratio (35x) compared to the Software industry average (46.8x).

PE vs Market: FTNT is poor value based on its PE Ratio (35x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: FTNT is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: FTNT is overvalued based on its PB Ratio (11.7x) compared to the US Software industry average (5.3x).


Next Steps

Future Growth

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

11.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FTNT's forecast earnings growth (11.7% per year) is above the savings rate (2.7%).

Earnings vs Market: FTNT's earnings (11.7% per year) are forecast to grow slower than the US market (14.6% per year).

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

Revenue vs Market: FTNT's revenue (10.3% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: FTNT's revenue (10.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: FTNT's Return on Equity is forecast to be high in 3 years time (26.3%)


Next Steps

Past Performance

How has Fortinet performed over the past 5 years?

65.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: FTNT's earnings have grown significantly by 65.7% per year over the past 5 years.

Accelerating Growth: FTNT's earnings growth over the past year (320.8%) exceeds its 5-year average (65.7% per year).

Earnings vs Industry: FTNT earnings growth over the past year (320.8%) exceeded the Software industry 19.1%.


Return on Equity

High ROE: FTNT's Return on Equity (33.2%) is considered high.


Return on Assets

ROA vs Industry: FTNT has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: FTNT has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Fortinet's financial position?


Financial Position Analysis

Short Term Liabilities: FTNT's short term assets ($2.4B) exceeds its short term liabilities ($1.3B)

Long Term Liabilities: FTNT's short term assets (2.4B) exceeds its long term liabilities (953.4M)


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

Inventory Level: FTNT has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if FTNT's debt is covered by short term assets.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

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

What is the CEO of Fortinet's salary, the management and board of directors tenure and is there insider trading?

2.6yrs

Average management tenure


CEO

Ken Xie (56yo)

19yrs

Tenure

US$6,761,686

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 Tride ...


CEO Compensation Analysis

Compensation vs. Market: Ken's total compensation ($USD6.76M) is below average for companies of similar size in the US market ($USD11.18M).

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


Management Age and Tenure

2.6yrs

Average Tenure

53yo

Average Age

Experienced Management: FTNT's management team is considered experienced (2.6 years average tenure).


Board Age and Tenure

6.5yrs

Average Tenure

63yo

Average Age

Experienced Board: FTNT's board of directors are considered experienced (6.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$148,51413 Nov 18
Peter Cohen
EntityIndividual
Shares2,000
Max PriceUS$74.26

Ownership Breakdown


Management Team

  • Michael Xie (50yo)

    Founder

    • Tenure: 18.7yrs
    • Compensation: US$3.47m
  • Patrice Perche

    Senior Executive Vice President of Worldwide Sales & Support

    • Tenure: 3.8yrs
  • Ken Xie (56yo)

    Founder

    • Tenure: 19yrs
    • Compensation: US$6.76m
  • John Whittle (50yo)

    Executive VP of Corporate Development & Strategic Alliances

    • Tenure: 13yrs
    • Compensation: US$2.40m
  • Peter Salkowski

    Vice President of Investor Relations

    • Tenure: 1.7yrs
  • Keith Jensen (60yo)

    CFO & Chief Accounting Officer

    • Tenure: 1.7yrs
    • Compensation: US$2.26m
  • John Maddison

    Chief Marketing Officer & Executive VP of Products

    • Tenure: 0.8yrs
  • Laurie Buzzell

    Vice President of Human Resources

    • Tenure: 0.8yrs
  • Stacey Wu

    Senior Vice President of Global Marketing

    • Tenure: 2.8yrs
  • Sandra Wheatley

    Senior Vice President of Global Corporate Communications & Customer Marketing

    • Tenure: 2.3yrs

Board Members

  • William Neukom (77yo)

    Lead Independent Director

    • Tenure: 1.5yrs
    • Compensation: US$347.88k
  • Chris Paisley (66yo)

    Independent Director

    • Tenure: 15.7yrs
    • Compensation: US$357.70k
  • Michael Xie (50yo)

    Founder

    • Tenure: 18.7yrs
    • Compensation: US$3.47m
  • Ken Xie (56yo)

    Founder

    • Tenure: 19yrs
    • Compensation: US$6.76m
  • Ming Hsieh (63yo)

    Independent Director

    • Tenure: 6.5yrs
    • Compensation: US$336.03k
  • Gary Locke (69yo)

    Independent Director

    • Tenure: 4.1yrs
    • Compensation: US$335.52k
  • Judith Sim (50yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$333.27k

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$13.090b
  • Shares outstanding: 170.99m
  • 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

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, includ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 00:19
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.