Here's How Much You'd Have If You Invested $1000 in Fortinet a Decade Ago
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Fortinet (FTNT) ten years ago? It may not have been easy to hold on to FTNT for all that time, but if you did, how much would your investment be worth today?
Fortinet's Business In-Depth
With that in mind, let's take a look at Fortinet's main business drivers.
Headquartered in Sunnyvale, CA, Fortinet, Inc. is a provider of network security appliances and Unified Threat Management (UTM) network security solutions to enterprises, service providers and government entities worldwide.
Its solutions are designed to integrate multiple levels of security protection, including firewall, virtual private networking (VPN), antivirus, intrusion prevention (IP), web filtering, anti-spam and wide area network (WAN) acceleration.
Through its products and subscription services, the company provides integrated protection against dynamic security threats while simplifying the IT security infrastructure. Its solutions incorporate application-specific integrated circuits, hardware architecture, operating system, and associated security and networking functions to defend against multiple categories of IT security attacks without impacting network performance.
The company’s network security gateways protect customer data, reduce security complexities and lower the total cost of ownership. Customers are able to implement their security policies on traffic between internal networks and the Internet, as well as between internal and private networks shared with partners.
Its flagship UTM solution consists of the FortiGate appliance product line and FortiGuard security subscription services.
Its products and services are sold through a network of more than 20,000 channel partners worldwide, including distributors, resellers, value-added resellers and managed service providers. The company caters to more than 450,000 customers worldwide that includes most of the Fortune 100 companies.
The company derives a significant portion of total sales from the top 10 biggest distributors, of which Exclusive Networks Group has the highest share and accounted for 31% of 2019 total revenues.
Fortinet reported revenues of $2.59 billion in 2020, which increased 20% from 2019.
Product revenue was $916.4 million, up 16% while Service revenue of $1.68 billion improved 22% year over year.
The company faces significant competition with Palo Alto Networks, CyberArk, Qualys and Cisco in the network security as well as cloud security space.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Fortinet, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in August 2011 would be worth $14,616.35, or a gain of 1,361.63%, as of August 5, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 266.87% and gold's return of 4.81% over the same time frame.
Analysts are anticipating more upside for FTNT.
Fortinet is benefiting from rising demand for security and networking products amid coronavirus crisis as a huge global workforce is working remotely. It is also benefiting from robust growth in Fortinet Security Fabric, cloud and Software-defined Wide Area Network (SD-WAN) offerings. Moreover, continued deal wins, especially those of high value, are a key driver. Higher IT spending on cybersecurity is further expected to aid Fortinet to grow faster than the security market. Also, focus on enhancing its unified threat management (UTM) portfolio through product development and acquisitions is a tailwind for Fortinet. However, intensifying competition due to increasing consolidation in the security industry poses concerns. Increased hiring, mostly in sales and marketing, and mergers & acquisitions spends remain overhangs on margin.
The stock is up 20.01% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 12 higher, for fiscal 2021. The consensus estimate has moved up as well.
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