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Fortinet (FTNT) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, Fortinet (FTNT) closed at $313.81, marking a +1.2% move from the previous day. The stock lagged the S&P 500's daily gain of 1.71%.

Coming into today, shares of the network security company had gained 2.84% in the past month. In that same time, the Computer and Technology sector lost 4.5%, while the S&P 500 lost 2.25%.

Investors will be hoping for strength from FTNT as it approaches its next earnings release, which is expected to be November 4, 2021. The company is expected to report EPS of $0.94, up 6.82% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $809.86 million, up 24.38% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.87 per share and revenue of $3.24 billion, which would represent changes of +15.52% and +24.85%, respectively, from the prior year.

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Any recent changes to analyst estimates for FTNT should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.59% lower within the past month. FTNT is currently a Zacks Rank #3 (Hold).

Digging into valuation, FTNT currently has a Forward P/E ratio of 80.08. This valuation marks a premium compared to its industry's average Forward P/E of 43.73.

Also, we should mention that FTNT has a PEG ratio of 5.62. 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 2.65 based on yesterday's closing prices.

The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 107, which puts it in the top 43% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research