New Lifetime High Today: Fortinet (FTNT)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Fortinet ( FTNT) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Fortinet as such a stock due to the following factors:

  • FTNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.6 million.
  • FTNT has traded 146,555 shares today.
  • FTNT is trading at a new lifetime high.

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More details on FTNT:

Fortinet, Inc. provides network security appliances and unified threat management network security solutions worldwide. The company primarily offers FortiGate physical and virtual appliances that provide a set of security and networking functions. FTNT has a PE ratio of 155.5. Currently there are 16 analysts that rate Fortinet a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Fortinet has been 1.8 million shares per day over the past 30 days. Fortinet has a market cap of $4.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.03 and a short float of 3.5% with 3.05 days to cover. Shares are up 48.9% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fortinet as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 27.3%. Since the same quarter one year prior, revenues rose by 25.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • FTNT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, FTNT has a quick ratio of 1.79, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, FTNT's share price has jumped by 59.41%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Software industry and the overall market, FORTINET INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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