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Fortinet Inc. (NASDAQ: FTNT)’s Upside Potential Is High

Fortinet Inc. (NASDAQ:FTNT) shares, rose in value on Wednesday, 05/24/23, with the stock price down by -2.20% to the previous day’s close as strong demand from buyers drove the stock to $66.59.

Actively observing the price movement in the last trading, the stock closed the session at $68.09, falling within a range of $66.01 and $69.46. The value of beta (5-year monthly) was 1.16 whereas the PE ratio was 54.90 over 12-month period. Referring to stock’s 52-week performance, its high was $71.29, and the low was $42.61. On the whole, FTNT has fluctuated by 5.41% over the past month.

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With the market capitalization of Fortinet Inc. currently standing at about $51.17 billion, investors are eagerly awaiting this quarter’s results, scheduled for May 04, 2023. As a result, investors might want to see an improvement in the stock’s price before the company announces its earnings report. Analysts are projecting the company’s earnings per share (EPS) to be $0.34, which is expected to increase to $0.38 for fiscal year $1.46 and then to about $1.74 by fiscal year 2024. Data indicates that the EPS growth is expected to be 22.70% in 2024, while the next year’s EPS growth is forecast to be 19.20%.

Analysts have estimated the company’s revenue for the quarter at $1.3 billion, with a low estimate of $1.29 billion and a high estimate of $1.32 billion. According to the average forecast, sales growth in current quarter could jump up 26.60%, compared to the corresponding quarter of last year. Wall Street analysts also predicted that in 2024, the company’s y-o-y revenues would reach $5.47 billion, representing an increase of 23.80% from the revenues reported in the last year’s results.

Revisions could be a useful indicator to get insight on short-term price movement; so for the company, there were no upward and no downward review(s) in last seven days. We see that FTNT’s technical picture suggests that short-term indicators denote the stock is a 100% Buy on average. However, medium term indicators have put the stock in the category of 100% Buy while long term indicators on average have been pointing out that it is a 100% Buy.

35 analyst(s) have assigned their ratings of the stock’s forecast evaluation on a scale of 1.00-5.00 to indicate a strong buy to a strong sell recommendation. The stock is rated as a Hold by 11 analyst(s), 20 recommend it as a Buy and 4 called the FTNT stock Overweight. In the meantime, 0 analyst(s) believe the stock as Underweight and 0 think it is a Sell. Thus, investors eager to increase their holdings of the company’s stock will have an opportunity to do so as the average rating for the stock is Overweight.

The stock’s technical analysis shows that the PEG ratio is about 2.84, with the price of FTNT currently trading nearly 1.24% and 2.04% away from the simple moving averages for 20 and 50 days respectively. The Relative Strength Index (RSI, 14) currently indicates a reading of 50.75, while the 7-day volatility ratio is showing 2.90% which for the 30-day chart, stands at 2.56%. Furthermore, Fortinet Inc. (FTNT)’s beta value is 1.14, and its average true range (ATR) is 1.68.

A comparison of Fortinet Inc. (FTNT) with its peers suggests the former has fared considerably weaker in the market. FTNT showed an intraday change of -2.20% in last session, and over the past year, it grew by 16.27%%. In comparison, Cisco Systems Inc. (CSCO) has moved lower at -1.02% on the day and was up 11.67% over the past 12 months. On the other hand, the price of CrowdStrike Holdings Inc. (CRWD) has risen 3.68% on the day. The stock, however, is off -0.05% from where it was a year ago. Additionally, there is a gain of 7.68% for Palo Alto Networks Inc. (PANW) in last trading while the stock has seen an overall depriciation of 22.52%% over the past year. The PE ratio stands at 54.90 for Fortinet Inc., compared to 17.41 for Cisco Systems Inc. Other than that, the overall performance of the S&P 500 during the last trading session shows that it lost -0.73%. Meanwhile, the Dow Jones Industrial Slipped by -0.77%.

Data on historical trading for Fortinet Inc. (NASDAQ:FTNT) indicates that the trading volumes over the past 10 days have averaged 4.78 million and over the past 3 months, they’ve averaged 4.31 million. According to company’s latest data on outstanding shares, there are 783.20 million shares outstanding.

Nearly 12.00% of Fortinet Inc.’s shares belong to company insiders and institutional investors own 67.80% of the company’s shares. The data on short interest also indicates that stock shorts accounted for 11.4 million shares as on Apr 27, 2023, resulting in a short ratio of 2.91. According to the data, the short interest in Fortinet Inc. (FTNT) stood at 1.45% of shares outstanding as of Apr 27, 2023; the number of short shares registered in Mar 30, 2023 reached 12.79 million. The stock has risen by 36.20% since the beginning of the year, thereby showing the potential of a further growth. This could raise investors’ confidence to be optimistic about the FTNT stock heading into the next quarter.

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