Fortinet Beneish M Score

FTNT
 Stock
  

USD 54.29  1.77  3.37%   

This module uses fundamental data of Fortinet to approximate the value of its Beneish M Score. Fortinet M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please check Fortinet Piotroski F Score and Fortinet Altman Z Score analysis.
  
Fortinet Issuance Repayment of Debt Securities is comparatively stable at the moment as compared to the past year. Fortinet reported Issuance Repayment of Debt Securities of 967.5 Million in 2021. Debt to Equity Ratio is likely to gain to 7.07 in 2022, whereas Total Debt is likely to drop slightly above 884.4 M in 2022. Fortinet Cash Flow Per Share is comparatively stable at the moment as compared to the past year. Fortinet reported Cash Flow Per Share of 1.85 in 2021. Total Assets Per Share is likely to gain to 7.88 in 2022, whereas EBITDA Margin is likely to drop 0.21 in 2022.
At this time, it appears that Fortinet is an unlikely manipulator. The earnings manipulation may begin if Fortinet's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Fortinet executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Fortinet's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-16.04
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.0Focus
Asset Quality-31.42Focus
Expense Coverage0.74Focus
Gross Margin Strengs1.08Focus
Accruals Factor0.74Focus
Depreciation Resistance1.29Focus
Net Sales Growth1.08Focus
Financial Leverage Condition0.99Focus

Fortinet Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Fortinet's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues3.6 B3.3 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative Expense1.2 B1.5 B
Significantly Down
Increasing
Slightly volatile
Net Cash Flow from Operations1.6 B1.5 B
Significantly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion68.8 M84.4 M
Significantly Down
Increasing
Slightly volatile
Total Assets6.4 B5.9 B
Significantly Up
Increasing
Slightly volatile
Investments1.3 B1.7 B
Significantly Down
Increasing
Slightly volatile
Investments Current1.3 B1.2 B
Significantly Up
Increasing
Slightly volatile
Investments Non Current475.6 M440.8 M
Significantly Up
Increasing
Stable
Property Plant and Equipment Net741.9 M687.6 M
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables871.5 M807.7 M
Significantly Up
Increasing
Slightly volatile
Total Liabilities5.5 B5.1 B
Significantly Up
Increasing
Slightly volatile
Current Assets2.9 B3.6 B
Significantly Down
Increasing
Slightly volatile
Assets Non Current2.5 B2.3 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities2.5 B2.3 B
Significantly Up
Increasing
Slightly volatile
Liabilities Non CurrentB2.8 B
Significantly Up
Increasing
Slightly volatile
Total Debt884.4 M889.6 M
Slightly Down
Decreasing
Slightly volatile
Debt Non Current884.4 M889.6 M
Slightly Down
Decreasing
Slightly volatile
Operating Income701.7 M650.4 M
Significantly Up
Increasing
Slightly volatile
Gross Margin0.830.766
Significantly Up
Increasing
Slightly volatile

Fortinet Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Fortinet's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Fortinet in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Fortinet's degree of accounting gimmicks and manipulations.

About Fortinet Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

68.75 Million

Fortinet Depreciation Amortization and Accretion is comparatively stable at the moment as compared to the past year. Fortinet reported Depreciation Amortization and Accretion of 84.4 Million in 2021

Fortinet Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Fortinet. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues1.49 B1.8 B2.16 B2.59 B3.34 B3.61 B
Total Assets2.26 B3.08 B3.88 B4.04 B5.92 B6.39 B
Current Assets1.72 B2.22 B2.77 B2.74 B3.6 B2.88 B
Assets Non Current541.1 M857.1 M1.11 B1.3 B2.32 B2.5 B
Total Liabilities1.67 B2.07 B2.54 B3.19 B5.12 B5.52 B
Current Liabilities1.03 B1.26 B1.46 B1.83 B2.32 B2.5 B
Operating Income109.8 M234.4 M351 M531.8 M650.4 M701.75 M
Investments538.3 M604.2 M987.4 M893.8 M1.67 B1.32 B
Investments Current440.3 M537.2 M843.1 M775.5 M1.23 B1.33 B

Fortinet ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Fortinet's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Fortinet's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Fortinet Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Fortinet's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Fortinet using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Fortinet based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Fortinet, Inc. provides broad, integrated, and automated cybersecurity solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Fortinet, Inc. was incorporated in 2000 and is headquartered in Sunnyvale, California. Fortinet operates under SoftwareInfrastructure classification in the United States and is traded on NASDAQ Exchange. It employs 10860 people.

Fortinet Investors Sentiment

The influence of Fortinet's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Fortinet. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.
Investor biases related to Fortinet's public news can be used to forecast risks associated with investment in Fortinet. The trend in average sentiment can be used to explain how an investor holding Fortinet can time the market purely based on public headlines and social activities around Fortinet. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
Fortinet's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Fortinet's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Fortinet's news discussions. The higher the estimate score, the more favorable is the investor's outlook on Fortinet.

Fortinet Implied Volatility

    
  35.6  
Fortinet's implied volatility exposes the market's sentiment of Fortinet stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Fortinet's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Fortinet stock will not fluctuate a lot when Fortinet's options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Fortinet in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Fortinet's short interest history, or implied volatility extrapolated from Fortinet options trading.

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Please check Fortinet Piotroski F Score and Fortinet Altman Z Score analysis. Note that the Fortinet information on this page should be used as a complementary analysis to other Fortinet's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Transaction History module to view history of all your transactions and understand their impact on performance.

Complementary Tools for Fortinet Stock analysis

When running Fortinet price analysis, check to measure Fortinet's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Fortinet is operating at the current time. Most of Fortinet's value examination focuses on studying past and present price action to predict the probability of Fortinet's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Fortinet's price. Additionally, you may evaluate how the addition of Fortinet to your portfolios can decrease your overall portfolio volatility.
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Is Fortinet's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Fortinet. If investors know Fortinet will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Fortinet listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.31
Market Capitalization
42.8 B
Quarterly Revenue Growth YOY
0.29
Return On Assets
0.0833
Return On Equity
2.01
The market value of Fortinet is measured differently than its book value, which is the value of Fortinet that is recorded on the company's balance sheet. Investors also form their own opinion of Fortinet's value that differs from its market value or its book value, called intrinsic value, which is Fortinet's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Fortinet's market value can be influenced by many factors that don't directly affect Fortinet's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Fortinet's value and its price as these two are different measures arrived at by different means. Investors typically determine Fortinet value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Fortinet's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.