Fortinet (FTNT) to Post Q2 Earnings: What's in the Offing?

Fortinet, Inc. FTNT is slated to report second-quarter 2020 results on Aug 6.

The company anticipates quarterly revenues of $590-$605 million. The Zacks Consensus Estimate for revenues is pegged at $598.8 million, calling for year-over-year growth of 14.8%.

Non-GAAP earnings per share are projected at 64-66 cents. The Zacks Consensus Estimate is pegged at 65 cents per share, indicating an increase of 12.1%, year on year.

The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 16.1%.

Let’s see how things have shaped up for the upcoming announcement.

Fortinet, Inc. Price and Consensus Fortinet, Inc. Price and Consensus

Fortinet, Inc. price-consensus-chart | Fortinet, Inc. Quote

Factors at Play

Fortinet’s second-quarter performance is expected to have benefited from robust momentum in FortiGate virtual machines, which is driving its private and public cloud billings.

Moreover, a huge global workforce has been working remotely in a bid to contain the spread of coronavirus. However, more people logging into employers' networks implies a greater need for security. This trend might have spurred demand for Fortinet’s products during the quarter under review.

The rapid adoption of FortiGate-based secure SD-WAN offerings is likely to have aided the company’s Product segment. The Zacks Consensus Estimate for Product revenues in the second second stands at $205 million, suggesting 7.9% year-over-year growth.

Also, FortiGuard security subscriptions and FortiCare technical support services are anticipayed to have maintained solid traction, supporting the company’s Services segment. The Zacks Consensus Estimate for quarterly Services revenues is pinned at $395 million, indicating 19% year-over-year growth.

Besides, the company is expected to have benefited from its IoT offering with the Forti- ASIC SPU technology, which provides a cost and performance advantage over its competitors.

What Our Model Says

Our proven model does not predict an earnings beat for Fortinet this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Fortinet carries a Zacks Rank of 2 and has an Earnings ESP of 0.00%, at present.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Cogent Communications Holdings CCOI has an Earnings ESP of +11.66% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics SYNA has an Earnings ESP of +10.6 % and currently carries a Zacks Rank of 2.

Benefitfocus BNFT has an Earnings ESP of +6.25% and carries a Zacks Rank of 2, currently.

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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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