The 10-second takeaway
For the quarter ended March 31 (Q1), Fortinet beat expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share didn't change.
Margins dropped across the board.
Fortinet logged revenue of $117.2 million. The 19 analysts polled by S&P Capital IQ expected to see a top line of $114.9 million on the same basis. GAAP reported sales were 26% higher than the prior-year quarter's $93.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.11. The 21 earnings estimates compiled by S&P Capital IQ anticipated $0.11 per share on the same basis. GAAP EPS of $0.09 were the same as the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 73.5%, 140 basis points worse than the prior-year quarter. Operating margin was 16.0%, 220 basis points worse than the prior-year quarter. Net margin was 12.1%, 250 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $124.9 million. On the bottom line, the average EPS estimate is $0.12.
Next year's average estimate for revenue is $520.3 million. The average EPS estimate is $0.52.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 86 members out of 97 rating the stock outperform, and 11 members rating it underperform. Among 18 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give Fortinet a green thumbs-up, and four 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 $27.63.
Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not Fortinet makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-Dollar Revolution." Click here for instant access to this free report.
- Add Fortinet to My Watchlist.
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.