DCF Tool

FTNT

Fortinet Inc – Computer Terminal and Other Computer Peripheral Equipment Manufacturing
fortinet (nasdaq: ftnt) is a worldwide provider of network security appliances and the market leader in unified threat management (utm). our products and subscription services provide broad, integrated and high-performance protection against dynamic security threats while simplifying the it security infrastructure. our customers include enterprises, service providers and government entities worldwide, including the majority of the 2010 fortune global 100. fortinet’s flagship fortigate product delivers asic-accelerated performance and integrates multiple layers of security designed to help protect against application and network threats. fortinet’s broad product line goes beyond utm to help secure the extended enterprise – from endpoints, to the perimeter and the core, including databases and applications. fortinet is headquartered in sunnyvale, calif., with offices around the world.
Analysis Results
Intrinsic Value $42.87
Latest Price $58.24
Relative Value 36% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 51.1%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 10.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 51.1%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 0.796 0.719
2024 1.2 0.981
2025 1.82 1.34
2026 2.74 1.83
2027 4.15 2.49
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 48.5 billion. This corresponds to a present value of 26.3 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.36 billion. Adding in the terminal value gives a total present value of 33.7 billion.

There are presently 785.0 million outstanding shares, so the intrinsic value per share is 42.87.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 3,810,400,000
Current Cash 2,211,000,000
Current Liabilities 3,078,400,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,479,000,000
Change in NCWC -209,800,000
EBIT 965,000,000
Tax Provision 30,800,000
Depreciation and Amortization 104,300,000
Capital Expenditure -281,200,000
Unlevered Free Cash Flow 544,806,648
Current Assets 3,600,600,000
Current Cash 2,551,700,000
Current Liabilities 2,318,100,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,269,200,000
Change in NCWC -342,800,000
EBIT 645,800,000
Tax Provision 14,100,000
Depreciation and Amortization 84,400,000
Capital Expenditure -295,900,000
Unlevered Free Cash Flow 76,832,184
Current Assets 2,740,400,000
Current Cash 1,837,300,000
Current Liabilities 1,829,500,000
Current Debt 0
Non-Cash Working Capital (NCWC) -926,400,000
Change in NCWC -156,200,000
EBIT 491,600,000
Tax Provision 53,200,000
Depreciation and Amortization 68,800,000
Capital Expenditure -125,900,000
Unlevered Free Cash Flow 230,020,287
Current Assets 2,769,000,000
Current Cash 2,065,600,000
Current Liabilities 1,473,600,000
Current Debt 0
Non-Cash Working Capital (NCWC) -770,200,000
Change in NCWC -85,100,000
EBIT 344,200,000
Tax Provision 52,700,000
Depreciation and Amortization 61,600,000
Capital Expenditure -92,200,000
Unlevered Free Cash Flow 180,664,187
Current Assets 2,220,900,000
Current Cash 1,649,600,000
Current Liabilities 1,256,400,000
Current Debt 0
Non-Cash Working Capital (NCWC) -685,100,000
Change in NCWC -123,420,000
EBIT 231,000,000
Tax Provision -81,300,000
Depreciation and Amortization 55,700,000
Capital Expenditure -53,000,000
Unlevered Free Cash Flow 110,280,000
Current Assets 1,716,820,000
Current Cash 1,251,277,000
Current Liabilities 1,027,223,000
Current Debt 0
Non-Cash Working Capital (NCWC) -561,680,000
Change in NCWC -185,431,000
EBIT 110,144,000
Tax Provision 92,595,000
Depreciation and Amortization 55,476,000
Capital Expenditure -135,312,000
Unlevered Free Cash Flow -237,375,235
Current Assets 1,538,716,000
Current Cash 1,085,525,000
Current Liabilities 829,440,000
Current Debt 0
Non-Cash Working Capital (NCWC) -376,249,000
Change in NCWC -76,771,000
EBIT 46,941,000
Tax Provision 10,961,000
Depreciation and Amortization 48,520,000
Capital Expenditure -67,182,000
Unlevered Free Cash Flow -60,416,545
Current Assets 1,270,543,000
Current Cash 891,351,000
Current Liabilities 678,670,000
Current Debt 0
Non-Cash Working Capital (NCWC) -299,478,000
Change in NCWC -129,867,000
EBIT 22,477,000
Tax Provision 9,018,000
Depreciation and Amortization 31,589,000
Capital Expenditure -37,358,000
Unlevered Free Cash Flow -125,078,881
Current Assets 1,046,865,000
Current Cash 720,020,000
Current Liabilities 496,456,000
Current Debt 0
Non-Cash Working Capital (NCWC) -169,611,000
Change in NCWC -726,000
EBIT 59,324,000
Tax Provision 36,206,000
Depreciation and Amortization 22,028,000
Capital Expenditure -32,197,000
Unlevered Free Cash Flow 13,531,849
Current Assets 735,546,000
Current Cash 491,370,000
Current Liabilities 413,061,000
Current Debt 0
Non-Cash Working Capital (NCWC) -168,885,000
Change in NCWC -5,161,000
EBIT 72,090,000
Tax Provision 31,668,000
Depreciation and Amortization 15,623,000
Capital Expenditure -13,877,000
Unlevered Free Cash Flow 38,612,897
Current Assets 569,274,000
Current Cash 413,694,000
Current Liabilities 319,304,000
Current Debt 0
Non-Cash Working Capital (NCWC) -163,724,000
Change in NCWC -30,157,000
EBIT 100,475,000
Tax Provision 38,160,000
Depreciation and Amortization 11,564,000
Capital Expenditure -22,083,000
Unlevered Free Cash Flow 23,282,123

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