Today we're going to take a look at the well-established $Fortinet (FTNT.US)$. The company's stock saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$62.88 and falling to the lows of US$48.55. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Fortinet's current trading price of US$48.59 reflective of the actual value of the  large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Fortinet's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Fortinet

What Is Fortinet Worth?

Fortinet appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average.  I've used the price-to-earnings ratio in this instance because there's not enough visibility to forecast its cash flows. The stock's ratio of 56.85x is currently well-above the industry average of 39.42x, meaning that it is trading at a more expensive price relative to its peers.   But, is there another opportunity to buy low in the future?  Since Fortinet's share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Fortinet?

NasdaqGS:FTNT Earnings and Revenue Growth September 25th 2022

Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio.   Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations.    With profit expected to grow by 92% over the next couple of years, the future seems bright for Fortinet. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? FTNT's optimistic future growth appears to have been factored into the current share price,  with shares trading above industry price multiples.  However, this brings up another question – is now the right time to sell?  If you believe FTNT should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you've been keeping an eye on FTNT for a while,  now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the  positive outlook  is encouraging for FTNT, which means it's worth diving deeper into other factors in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing.   For example, Fortinet has 2 warning signs (and 1 which is potentially serious) we think you should know about.

If you are no longer interested in Fortinet, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.