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What's in the Cards for Fortinet (FTNT) in Q2 Earnings?
Fortinet Inc. (FTNT - Free Report) is set to report second-quarter 2016 results on Jul 28. Last quarter, the company posted a negative earnings surprise of 500%. Let us see how things are shaping up for this announcement.
Factors to Consider
Fortinet’s network security solutions include firewall, VPN, application control, antivirus, intrusion prevention, web filtering, anti-spam and WAN acceleration. The company reported mixed first-quarter results, wherein the top line beat the Zacks Consensus Estimate but the bottom line compared unfavorably with the same.
Despite the persistent macro uncertainty, the company seems positive on the back of a healthy network security market, solid product line-up and investment plans.
However, competition from key network security players such as Cisco Systems Inc. (CSCO - Free Report) , Check Point, Juniper Networks and Palo Alto Networks, remains a concern. Nonetheless, product ramp-ups, deal wins, continuous growth in the network security market and expected benefits from the ongoing investments remain positives.
FORTINET INC Price and EPS Surprise
FORTINET INC Price and EPS Surprise | FORTINET INC Quote
Earnings Whispers?
Our proven model does not conclusively show that Fortinet will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 2 cents. Hence, the difference is 0.00%.
Zacks Rank: Fortinet currently has a Zacks Rank #5 (Strong Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Garmin Ltd. (GRMN - Free Report) with an Earnings ESP of +4.48% and a Zacks Rank #3
Amazon.com, Inc. (AMZN - Free Report) with Earnings ESP of +37.72% and a Zacks Rank #3
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