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Here's Why You Should Add Fortinet (FTNT) to Your Portfolio
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Fortinet Inc. (FTNT - Free Report) has been an investor favorite for quite some time as evident from its price momentum. The stock has gained 45.9% in the past year, substantially outperforming the 32.3% rally of the industry it belongs to.
Let’s delve deeper and take a look at the key aspects aiding the company’s performance.
The stock has a stellar record of positive earnings surprises, having beaten the Zacks Consensus Estimate in all the last four quarters, with an average positive surprise of 20.1%.
In the last reported fourth-quarter 2017 results, the company’s non-GAAP earnings of 32 cents per share beat the Zacks Consensus Estimate of 29 cents and also increased from the year-ago figure of 30 cents per share.
A large number of deal wins and customer additions aided top-line growth in the quarter that increased 14.8% year over year to reach $416.7 million, beating the Zacks Consensus Estimate of $409 million.
We believe Fortinet’s initiative to change its business model to a subscription-based service provider will drive the company’s bottom line in the long run. Subscription-based service is a high gross margin business (approximately 80%) compared with the hardware-centric model.
Notably, the company generates more than 50% of the total revenues from these services, which led to a 70 bps expansion in 2017 gross margin. We anticipate this strategy to continue to drive the company’s bottom-line performance.
Notably, per a recent report by Markets and Markets, the cyber security market is expected to witness CAGR of 11% in the 2017-2022 period. These predictions bode well for Fortinet, which has a diversified product portfolio for PCs, mobile and enterprise security. Furthermore, Fortinet has partnered with Exodus Intelligence, Cisco ACI, NTT Communications and VMware NSX Partner Ecosystem to provide best-in-class cyber security solutions.
We believe all these positives make this Zacks Rank #2 (Buy) stock a must have in investors' portfolio.
NVIDIA, Micron and Western Digital have long-term expected EPS growth rates of 10.3%, 10% and 19%, respectively.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Here's Why You Should Add Fortinet (FTNT) to Your Portfolio
Fortinet Inc. (FTNT - Free Report) has been an investor favorite for quite some time as evident from its price momentum. The stock has gained 45.9% in the past year, substantially outperforming the 32.3% rally of the industry it belongs to.
Let’s delve deeper and take a look at the key aspects aiding the company’s performance.
The stock has a stellar record of positive earnings surprises, having beaten the Zacks Consensus Estimate in all the last four quarters, with an average positive surprise of 20.1%.
In the last reported fourth-quarter 2017 results, the company’s non-GAAP earnings of 32 cents per share beat the Zacks Consensus Estimate of 29 cents and also increased from the year-ago figure of 30 cents per share.
A large number of deal wins and customer additions aided top-line growth in the quarter that increased 14.8% year over year to reach $416.7 million, beating the Zacks Consensus Estimate of $409 million.
We believe Fortinet’s initiative to change its business model to a subscription-based service provider will drive the company’s bottom line in the long run. Subscription-based service is a high gross margin business (approximately 80%) compared with the hardware-centric model.
Notably, the company generates more than 50% of the total revenues from these services, which led to a 70 bps expansion in 2017 gross margin. We anticipate this strategy to continue to drive the company’s bottom-line performance.
Notably, per a recent report by Markets and Markets, the cyber security market is expected to witness CAGR of 11% in the 2017-2022 period. These predictions bode well for Fortinet, which has a diversified product portfolio for PCs, mobile and enterprise security. Furthermore, Fortinet has partnered with Exodus Intelligence, Cisco ACI, NTT Communications and VMware NSX Partner Ecosystem to provide best-in-class cyber security solutions.
We believe all these positives make this Zacks Rank #2 (Buy) stock a must have in investors' portfolio.
Some other top-ranked stocks in the broader technology sector are NVIDIA Corporation (NVDA - Free Report) , Micron Technology, Inc. (MU - Free Report) and Western Digital Corporation (WDC - Free Report) , all sporting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA, Micron and Western Digital have long-term expected EPS growth rates of 10.3%, 10% and 19%, respectively.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>