Critical Contrast: Fortinet (FTNT) vs. Its Competitors

Fortinet (NASDAQ: FTNT) is one of 196 public companies in the “IT Services & Consulting” industry, but how does it compare to its peers? We will compare Fortinet to similar companies based on the strength of its institutional ownership, profitability, valuation, dividends, analyst recommendations, earnings and risk.

Profitability

This table compares Fortinet and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fortinet 4.71% 9.36% 3.71%
Fortinet Competitors -21.03% -62.87% -4.35%

Valuation & Earnings

This table compares Fortinet and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Fortinet $1.38 billion $142.32 million 103.92
Fortinet Competitors $2.14 billion $366.31 million 16.42

Fortinet’s peers have higher revenue and earnings than Fortinet. Fortinet is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Fortinet has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Fortinet’s peers have a beta of 1.27, suggesting that their average share price is 27% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Fortinet and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fortinet 1 8 18 0 2.63
Fortinet Competitors 673 4399 7407 166 2.56

Fortinet presently has a consensus target price of $40.79, indicating a potential upside of 6.09%. As a group, “IT Services & Consulting” companies have a potential downside of 0.23%. Given Fortinet’s stronger consensus rating and higher possible upside, research analysts plainly believe Fortinet is more favorable than its peers.

Insider and Institutional Ownership

69.0% of Fortinet shares are owned by institutional investors. Comparatively, 62.1% of shares of all “IT Services & Consulting” companies are owned by institutional investors. 17.0% of Fortinet shares are owned by insiders. Comparatively, 16.4% of shares of all “IT Services & Consulting” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Fortinet beats its peers on 9 of the 13 factors compared.

Fortinet Company Profile

Fortinet, Inc. is a network security company. The Company provides cyber security solutions to a range of enterprises, service providers and government organizations across the world. Its network security solution consists of FortiGate physical, virtual machine and cloud platforms, which provide integrated security and networking functions to protect data, applications and users from network-and content-level security threats. The Company’s product offerings consist of its FortiGate product family, along with its FortiManager central management and FortiAnalyzer central logging and reporting product families. Its cybersecurity platform includes a range of products, which include its FortiMail e-mail security, FortiSandbox advanced threat protection (ATP), FortiWeb Web application firewall, FortiDDos and FortiDB database security appliances, as well as its FortiClient endpoint security software, FortiAP secure wireless access points and FortiSwitch secure switch connectivity products.

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