The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Fortinet met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped.
Margins dropped across the board.
Fortinet recorded revenue of $136.3 million. The 22 analysts polled by S&P Capital IQ predicted revenue of $136.3 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $116.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.14. The 24 earnings estimates compiled by S&P Capital IQ anticipated $0.14 per share. GAAP EPS of $0.10 for Q3 were 9.1% lower than the prior-year quarter's $0.11 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 72.3%, 100 basis points worse than the prior-year quarter. Operating margin was 18.9%, 320 basis points worse than the prior-year quarter. Net margin was 12.6%, 280 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $145.8 million. On the bottom line, the average EPS estimate is $0.15.
Next year's average estimate for revenue is $528.2 million. The average EPS estimate is $0.51.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 94 members out of 105 rating the stock outperform, and 11 members rating it underperform. Among 20 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 18 give Fortinet a green thumbs-up, and two 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 $29.90.
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