The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Fortinet beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly, and GAAP earnings per share shrank.
Margins dropped across the board.
Fortinet tallied revenue of $120.9 million. The 18 analysts polled by S&P Capital IQ predicted sales of $116.5 million. Sales were 29% higher than the prior-year quarter's $93.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.14. The 21 earnings estimates compiled by S&P Capital IQ averaged $0.12 per share on the same basis. GAAP EPS of $0.10 for Q4 were the same as the prior-year quarter's $0.10 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 73.1%, 100 basis points worse than the prior-year quarter. Operating margin was 21.9%, 20 basis points worse than the prior-year quarter. Net margin was 13.6%, 360 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $113.5 million. On the bottom line, the average EPS estimate is $0.11.
Next year's average estimate for revenue is $501.9 million. The average EPS estimate is $0.49.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 82 members out of 92 rating the stock outperform, and 10 members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 16 give Fortinet a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Fortinet is outperform, with an average price target of $25.94.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.