FTNT Intrinsic Value

FTNT

Fortinet Inc – Computer Terminal and Other Computer Peripheral Equipment Manufacturing

Fortinet secures the largest enterprise, service provider, and government organizations around the world. Fortinet empowers its customers with complete visibility and control across the expanding attack surface and the power to take on ever-increasing performance requirements today and into the future. Only the Fortinet Security Fabric platform can address the most critical security challenges and protect data across the entire digital infrastructure, whether in networked, application, multi-cloud or edge environments. Fortinet ranks #1 in the most security appliances shipped worldwide and more than 500,000 customers trust Fortinet to protect their businesses. Both a technology company and a learning organization, the Fortinet Network Security Expert (NSE) Training Institute has one of the largest and broadest cybersecurity training programs in the industry.

Analysis Results

Intrinsic Value	$42.20
Latest Price	$67.77
Relative Value	61% overvalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

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 10.8%. 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	0.718
2024	1.2	0.979
2025	1.82	1.33
2026	2.74	1.82
2027	4.15	2.48

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 47.9 billion. This corresponds to a present value of 25.8 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.33 billion. Adding in the terminal value gives a total present value of 33.1 billion.

There are presently 785.0 million outstanding shares, so the intrinsic value per share is 42.2.

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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