Fortinet (FTNT) Outpaces Stock Market Gains: What You Should Know
Fortinet (FTNT) closed the most recent trading day at $78.84, moving +0.93% from the previous trading session. This change outpaced the S&P 500’s 0.77% gain on the day. Elsewhere, the Dow gained 0.67%, while the tech-heavy Nasdaq added 0.75%.
Prior to today’s trading, shares of the network security company had gained 7.78% over the past month. This has lagged the Computer and Technology sector’s gain of 8.17% and the S&P 500’s gain of 8.19% in that time.
Investors will be hoping for strength from FTNT as it approaches its nex t earnings release, which is expected to be August 1, 2019. The company is expected to report EPS of $0.50, up 21.95% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $510.89 million, up 15.77% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.13 per share and revenue of $2.09 billion. These totals would mark changes of +15.76% and +15.77%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for FTNT. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. FTNT is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that FTNT has a Forward P/E ratio of 36.61 right now. For comparison, its industry has an average Forward P/E of 37.95, which means FTNT is trading at a discount to the group.
Also, we should mention that FTNT has a PEG ratio of 2.44. 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. Security stocks are, on average, holding a PEG ratio of 2.34 based on yesterday’s closing prices.
The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 103, putting it in the top 41% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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