Fortinet (FTNT) Laps the Stock Market: Here's Why

Fortinet (FTNT) closed the most recent trading day at $82.77, moving +1.68% from the previous trading session. This change outpaced the S&P 500's 1.15% gain on the day. Elsewhere, the Dow saw an upswing of 1.38%, while the tech-heavy Nasdaq appreciated by 1.38%.

Heading into today, shares of the network security company had gained 1.75% over the past month, outpacing the Computer and Technology sector's loss of 5.27% and the S&P 500's loss of 5.69%.

Market participants will be closely following the financial results of Fortinet in its upcoming release. The company is expected to report EPS of $0.62, up 6.9% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $1.73 billion, showing a 12.43% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $2.96 per share and a revenue of $7.6 billion, demonstrating changes of +7.25% and +11.71%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Fortinet. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% higher. Fortinet currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Fortinet is presently being traded at a Forward P/E ratio of 27.53. This represents a discount compared to its industry average Forward P/E of 37.98.

We can also see that FTNT currently has a PEG ratio of 2.48. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FTNT's industry had an average PEG ratio of 2.6 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 91, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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