* Note: Prices are in Million (M) USD.
Description:
Fortinet (Nasdaq: FTNT) is an American multinational corporation headquartered in Sunnyvale, California. It develops and sells cybersecurity solutions, including but not limited to physical products such as firewalls, plus software and services such as anti-virus protection, intrusion prevention systems and endpoint security components.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $2,876 M
Debt : $994 M
EBITDA : $2,086 M
Since Cash is greater than Total Debt, 5 points assigned.
This criteria used industry in which company operates:
Sector: Technology
Industry: Software - application
Based on sector, 5 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 29.64
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 19 overlapping fiscal years (max 20).Average Free Cash Flow: $543 M
Average Revenue: $1,725 M
Revenue Converted To Free Cash Flow (%): 31.5%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 25, 5 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $5,956 M
Revenue 4 Years Ago (2020-12-31): $2,594 M
Last 5 Years Average Revenue Growth: 26%
Since Revenue Growth is greater than 20, 5 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $772 M
Share Count 5 Years Ago (2020-12-31): $839 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $2.82
Trailing 12-Month Earnings Per Share (EPS): $2.53
Average Earnings Per Share (EPS): $2.68
Dividend Per Share (DPS): $0
Payout Ratio: 0%
Dividend Yield: 0%
Since Dividend Per Share is less than or equal to 0, 0 point assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 14 valid ROE years (max 20).Average ROE: 30.1%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $79
52-Week Low: $70
Threshold Price (15% Above 52-Week Low): $81
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $60,129 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 36 points to above Fortinet Inc (FTNT) stock.
Last 3 Years Avg PE 38.76, Fair Value PE 25, Industry Based PE 30, Growth Based PE 25, RCFC Based PE 37.17, ROE Based PE 34.08, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 29.58. Value-Trades has assined P/E value 29.58. Since an average (Current Year EPS + Next Year EPS) earning per share is $2.675.
The fair value of Fortinet Inc (FTNT) stock should be (29.58 x $2.675) = $79.14.
