Fortinet (FTNT) Falls More Steeply Than Broader Market: What Investors Need to Know

Fortinet (FTNT) ended the recent trading session at $67.45, demonstrating a -0.65% swing from the preceding day's closing price. This change lagged the S&P 500's 0.28% loss on the day. Meanwhile, the Dow lost 0.08%, and the Nasdaq, a tech-heavy index, lost 0.42%.

The network security company's stock has dropped by 0.75% in the past month, falling short of the Computer and Technology sector's gain of 3.64% and the S&P 500's gain of 2.67%.

The upcoming earnings release of Fortinet will be of great interest to investors. On that day, Fortinet is projected to report earnings of $0.38 per share, which would represent year-over-year growth of 11.76%. Meanwhile, the latest consensus estimate predicts the revenue to be $1.33 billion, indicating a 5.73% increase compared to the same quarter of the previous year.

FTNT's full-year Zacks Consensus Estimates are calling for earnings of $1.69 per share and revenue of $5.77 billion. These results would represent year-over-year changes of +3.68% and +8.77%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Fortinet. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.05% higher. Currently, Fortinet is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Fortinet is presently being traded at a Forward P/E ratio of 40.2. This valuation marks a premium compared to its industry's average Forward P/E of 30.57.

We can also see that FTNT currently has a PEG ratio of 2.48. 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. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.84.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 37, placing it within the top 15% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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