Fortinet

Fundamental analysis
Fortinet is an American software company focused on security in cyberspace. Its main products are antivirus protection, cloud protection and antispam. As the world changes, as conflicts and trade wars increase, the need to protect your own data increases. The antivirus industry is expected to grow at an average of 4% per year.
Fortinet has a very high PE ratio of 66, with an industry average of 25-31 (according to the source). This means the stock is quite a bit more expensive than its competitors (WMware, Oracle, Gen digital, Check Point Software Technologies). But it could also mean that Fortinet stock is in high demand right now, which is why investors are buying it, and why the PE ratio is this high. The share price itself is up 545% over the last 5 years.
Results
Fortinet is an extremely profitable company. For the past two years, it has steadily increased its sales every quarter by more than 25% over the previous year. The last quarter of 2022, the company even raised its sales by 33%. Meanwhile, the outlook for 2023 is to increase sales by 20% as per the company’s projections. This outlook can already be factored into the share price.
Technical analysis
FTNT shares have been trading within plus or minus 10% of the median price of $60 for the past year and a half. The company’s beta is 1.13 against the S&P 500. Brakes will cross the two long-term moving averages which will indicate a buy signal. However, the stock has not had a strong sell-off like other previously analyzed titles. Thus, the room for growth is less. At the same time, the stock’s behavior around the strong resistance at $71 should be watched. This resistance was not broken even during the time of the biggest growth between October 2021 and April 2022.
The RSI shows a sell signal after several days of strong growth.
The price is currently around strong resistance at $63, which has turned into stronger support several times in history.
Volume action is rather average.
Conclusion
Since the beginning of 2023, the stock has gained more than 25%, while the S&P 500 has gained only 7%. Are all the positive fundamentals of the company factored into the price? Unfortunately, we don’t know. But overall, the company looks healthy and robust according to the published numbers. Technical analysis shows a possible price increase of about 15% before the price approaches strong resistance at $71, which is a force to be reckoned with. Whether this is an interesting opportunity is up to the investor. In the event of a decline, on the other hand, the price can return to around USD 50 per share quite quickly.