In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Based on Fortinet, Inc.'s (NASDAQ:FTNT) earnings update in March 2019, the consensus outlook from analysts appear pessimistic, with earnings expected to decline by 19% in the upcoming year relative to the past 5-year average growth rate of 60%. Presently, with latest-twelve-month earnings at US$332m, we should see this fall to US$268m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for Fortinet
Can we expect Fortinet to keep growing?
Over the next three years, it seems the consensus view of the 27 analysts covering FTNT is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for FTNT, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 11% based on the most recent earnings level of US$332m to the final forecast of US$350m by 2022. This leads to an EPS of $2.19 in the final year of projections relative to the current EPS of $1.96. However, the near term margins may change heading into 2022, from the current levels of 18% to 14%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Fortinet, I've compiled three fundamental factors you should look at:
-
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
-
Valuation: What is Fortinet worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Fortinet is currently mispriced by the market.
-
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fortinet? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.