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

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Fortinet (FTNT - Free Report) closed the most recent trading day at $75.59, moving +0.67% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.23%. Elsewhere, the Dow gained 0.84%, while the tech-heavy Nasdaq lost 2.24%.

Prior to today's trading, shares of the network security company had gained 9.4% over the past month. This has outpaced the Computer and Technology sector's gain of 3.32% and the S&P 500's gain of 4.67% in that time.

Wall Street will be looking for positivity from Fortinet as it approaches its next earnings report date. On that day, Fortinet is projected to report earnings of $0.34 per share, which would represent year-over-year growth of 41.67%. Meanwhile, our latest consensus estimate is calling for revenue of $1.3 billion, up 26.41% from the prior-year quarter.

FTNT's full-year Zacks Consensus Estimates are calling for earnings of $1.46 per share and revenue of $5.46 billion. These results would represent year-over-year changes of +22.69% and +23.64%, respectively.

It is also important to note the recent changes to analyst estimates for Fortinet. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. Fortinet is currently a Zacks Rank #3 (Hold).

Investors should also note Fortinet's current valuation metrics, including its Forward P/E ratio of 51.32. Its industry sports an average Forward P/E of 42.68, so we one might conclude that Fortinet is trading at a premium comparatively.

It is also worth noting that FTNT currently has a PEG ratio of 2.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 1.74 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 88, which puts it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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