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Fortinet (FTNT) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Fortinet (FTNT - Free Report) closed at $58.91, marking a -1.19% move from the previous day. This change lagged the S&P 500's 0.45% loss on the day. Meanwhile, the Dow lost 0.67%, and the Nasdaq, a tech-heavy index, lost 0.05%.

Heading into today, shares of the network security company had gained 10.72% over the past month, outpacing the Computer and Technology sector's loss of 2.03% and the S&P 500's loss of 1.89% in that time.

Fortinet will be looking to display strength as it nears its next earnings release, which is expected to be August 3, 2022. The company is expected to report EPS of $0.22, up 15.79% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.03 billion, up 28% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.02 per share and revenue of $4.38 billion, which would represent changes of +27.5% and +31.01%, respectively, from the prior year.

Any recent changes to analyst estimates for Fortinet should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.5% higher within the past month. Fortinet is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Fortinet's current valuation metrics, including its Forward P/E ratio of 58.6. For comparison, its industry has an average Forward P/E of 58.6, which means Fortinet is trading at a no noticeable deviation to the group.

Also, we should mention that FTNT has a PEG ratio of 3.26. 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. FTNT's industry had an average PEG ratio of 2.79 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 73, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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