As you might know, Fortinet, Inc. (NASDAQ:FTNT) just kicked off its latest quarterly results with some very strong numbers. The company beat forecasts, with revenue of US$1.4b, some 2.3% above estimates, and statutory earnings per share (EPS) coming in at US$0.49, 44% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Fortinet after the latest results.

Taking into account the latest results, the most recent consensus for Fortinet from 40 analysts is for revenues of US$5.85b in 2024. If met, it would imply a modest 5.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 4.1% to US$1.79. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.79b and earnings per share (EPS) of US$1.52 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of US$72.44, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Fortinet at US$90.14 per share, while the most bearish prices it at US$59.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Fortinet's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 22% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it's pretty clear that, while Fortinet's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Fortinet's earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Fortinet analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Fortinet's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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