We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in the Cards for Fortinet (FTNT) in Q4 Earnings?
Read MoreHide Full Article
Fortinet Inc. (FTNT - Free Report) is set to report fourth-quarter 2016 results on Feb 2. Last quarter, the company posted a positive earnings surprise of 133.33%. Notably, Fortinet has outperformed the Zacks Consensus Estimate twice while missing the same on two occasions in the trailing four quarters. It has an average negative earnings surprise of 95.84%.
Let's 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.
For the last two quarters, there has been a slowdown in Fortinet’s sales. The company’s last quarter revenues were negatively impacted by slower sales completion in the enterprise and service provider markets. Fortinet observed that organizations have been breaking their cybersecurity investment plans into phases and implementing the same over longer periods of time instead of making a single large investment.
Apart from this, the company’s revenues are also likely to be hit by poor sales execution in the North America region and macro-economic issues in Latin America and the U.K. The company anticipates that the issues will take a few quarters to be fully resolved and has therefore lowered its billings, revenues and non-GAAP earnings outlook for 2016.
We anticipate the aforementioned challenges to negatively impact Fortinet’s fourth quarter performance.
Nonetheless, product ramp-ups, deal wins, continuous growth in the network security market and expected benefits from the ongoing investments remain the positives, which may have a favorable impact on fourth-quarter results.
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 8 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fortinet carries a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Twilio Inc. (TWLO - Free Report) , with an Earnings ESP of +8.33% and a Zacks Rank #3.
Pandora Media Inc. , with an Earnings ESP of +8.11% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
What's in the Cards for Fortinet (FTNT) in Q4 Earnings?
Fortinet Inc. (FTNT - Free Report) is set to report fourth-quarter 2016 results on Feb 2. Last quarter, the company posted a positive earnings surprise of 133.33%. Notably, Fortinet has outperformed the Zacks Consensus Estimate twice while missing the same on two occasions in the trailing four quarters. It has an average negative earnings surprise of 95.84%.
Let's 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.
For the last two quarters, there has been a slowdown in Fortinet’s sales. The company’s last quarter revenues were negatively impacted by slower sales completion in the enterprise and service provider markets. Fortinet observed that organizations have been breaking their cybersecurity investment plans into phases and implementing the same over longer periods of time instead of making a single large investment.
Apart from this, the company’s revenues are also likely to be hit by poor sales execution in the North America region and macro-economic issues in Latin America and the U.K. The company anticipates that the issues will take a few quarters to be fully resolved and has therefore lowered its billings, revenues and non-GAAP earnings outlook for 2016.
We anticipate the aforementioned challenges to negatively impact Fortinet’s fourth quarter performance.
Nonetheless, product ramp-ups, deal wins, continuous growth in the network security market and expected benefits from the ongoing investments remain the positives, which may have a favorable impact on fourth-quarter results.
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 8 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fortinet carries a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Fortinet, Inc. Price and EPS Surprise
Fortinet, Inc. Price and EPS Surprise | Fortinet, Inc. Quote
Stocks to Consider
Here are some companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
CEVA Inc. (CEVA - Free Report) , with an Earnings ESP of +9.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Twilio Inc. (TWLO - Free Report) , with an Earnings ESP of +8.33% and a Zacks Rank #3.
Pandora Media Inc. , with an Earnings ESP of +8.11% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>