HomeMost PopularTech StocksFortinet (FTNT): A Promising Investment Opportunity According to Wall Street Analysts

Fortinet (FTNT): A Promising Investment Opportunity According to Wall Street Analysts

Actionable Trade Ideas

always free

When it comes to making investment decisions, many investors turn to the recommendations of Wall Street analysts. These analysts, employed by brokerage firms, can significantly impact the price of a stock with their rating changes. However, it is essential to understand the reliability of these recommendations and how to utilize them effectively. In this article, we will explore what Wall Street analysts have to say about Fortinet (FTNT) and discuss the significance of brokerage recommendations.

The Average Brokerage Recommendation and Trend for Fortinet (FTNT)

Fortinet currently has an average brokerage recommendation (ABR) of 1.64, on a scale of 1 to 5, with 1 being Strong Buy and 5 being Strong Sell. The ABR of 1.64 indicates a recommendation between Strong Buy and Buy. Out of the 33 recommendations included in the ABR calculation, 22 are classified as Strong Buy and one as Buy. In other words, 66.7% of all recommendations indicate a Strong Buy rating, highlighting the optimism surrounding Fortinet.

Broker Rating Breakdown Chart for FTNT

Understanding the Limitations of Brokerage Recommendations

While brokerage recommendations can provide valuable insights, it is important not to rely solely on them when making investment decisions. Many studies have shown that brokerage recommendations have limited success in predicting the best-performing stocks. One reason for this limited success is the inherent positive bias that brokerage analysts display towards the stocks they cover. They tend to assign more favorable ratings, such as Strong Buy, due to the vested interest of their employers. As a result, these recommendations may not always align with the actual price movement of a stock.

Instead of relying solely on brokerage recommendations, it is advisable to utilize other indicators, such as the Zacks Rank, to make informed investment decisions. The Zacks Rank is a quantitive model that classifies stocks into five ranks based on earnings estimate revisions. It has demonstrated a strong correlation with near-term stock price movements and can serve as a reliable indicator of a stock’s performance.

The Zacks Rank vs. ABR

It is important to note the difference between the Zacks Rank and the ABR. While both are displayed on a scale of 1 to 5, they serve different purposes. The ABR is solely based on brokerage recommendations, displayed in decimals, and can be influenced by the positive bias of analysts. On the other hand, the Zacks Rank is driven by earnings estimate revisions and displayed in whole numbers. It provides a more objective assessment of a stock’s potential performance.

Earnings Estimate Revisions for Fortinet (FTNT)

The Zacks Consensus Estimate for Fortinet’s current year earnings stands at $1.51, remaining unchanged over the past month. Analysts’ steady views regarding the company’s earnings prospects, as indicated by the unchanged consensus estimate, suggest that Fortinet may perform in line with the broader market in the near term. Combining the ABR and the Zacks Rank, Fortinet currently holds a Zacks Rank #3 (Hold).

Conclusion: Is Fortinet (FTNT) a Good Investment?

Considering the positive sentiment among Wall Street analysts and the steady consensus estimate for Fortinet, it appears to be a promising investment opportunity. However, it is essential to conduct thorough research and utilize various indicators, including the Zacks Rank, to make well-informed investment decisions.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.