Fortinet: A Growth Stock Worth Watching for Serious Investors
Finding growth stocks that promise above-average returns can be a daunting challenge. These securities come with high risks, and investing in the wrong one could lead to significant losses.
Fortunately, tools like the Zacks Growth Style Score can help uncover promising companies. This system evaluates a firm’s actual growth potential, far beyond traditional metrics. Currently, Fortinet (FTNT) is highlighted as a compelling growth pick, boasting a strong Growth Score and a top Zacks Rank.
Empirical evidence shows that stocks with robust growth features tend to outperform the market. Specifically, those with a Growth Score of A or B along with a Zacks Rank of #1 (Strong Buy) or #2 (Buy) yield even higher returns.
Let’s delve into three key reasons why Fortinet stands out as an appealing growth investment right now.
Strong Earnings Growth
Earnings growth is a primary focus for investors. Double-digit annual earnings growth signals strong future potential and is a crucial indicator for prospective stock price increases. Fortinet’s historical earnings per share (EPS) growth rate stands at an impressive 42%. More importantly, its projected EPS growth for this year is 42.5%, significantly outpacing the industry’s forecast of 32.9%.
Impressive Cash Flow Growth
Cash flow is essential for any business, but its significance escalates for growth companies. High levels of cash flow allow these firms to invest in new projects without relying on costly external financing. Currently, Fortinet reports a year-over-year cash flow growth of 34.6%, contrasting starkly with its peers and the industry average of -13.9%.
If we examine its historical performance, Fortinet has sustained an annualized cash flow growth rate of 34.5% over the past 3-5 years, well above the industry average of 13.8%.
Encouraging Earnings Estimate Revisions
Monitoring changes in earnings estimates is crucial for investors. A positive trend in revisions usually indicates potential stock price uplifts. For Fortinet, current-year earnings estimates have recently been revised upward, with the Zacks Consensus Estimate climbing 0.6% over the past month.
Conclusion
Fortinet’s favorable earnings estimate revisions, alongside its Growth Score of B, have earned it a Zacks Rank of #1. These indicators suggest that it is primed to outperform and is a solid consideration for growth investors.
Top Stock Recommendation for Growth
Zacks Investment Research has surveyed thousands of stocks, and its experts have identified five choices with the potential to surge by 100% or more in the coming months. Among those recommendations, the Director of Research, Sheraz Mian, has selected one with the highest expected growth potential.
This highlighted company focuses on millennial and Gen Z markets, having reported nearly $1 billion in revenue last quarter. Following a recent dip in stock price, now represents a strategic entry point for investors. Previous Zacks selections, like Nano-X Imaging, rose by +129.6% within nine months, showcasing the potential for significant gains.
For more insights, check out our top stock selection along with four other noteworthy picks.
Fortinet, Inc. (FTNT): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
