![]() ![]() they could raise a lot more money easily), but now that top growth stock prices are down 40%, 50%, 70% and more (see table above) it's not so easy to raise capital.Ĭompounding the lower share price issue, is higher interest rates. This worked out great while their stock prices were high (i.e. For example, many high-growth companies were simply issuing more shares in 2021 to raise more capital for growth. YCharts Less Susceptible to Capital Market Challengesįortinet has been around since 2000 (founded by current chairman and CEO Ken Xie) and unlike a lot of other high-growth stocks, it is not at the mercy of the capital markets to fund its ongoing growth. Automated." More specifically, "the Fortinet Security Fabric brings together the concepts of convergence and consolidation to provide comprehensive cybersecurity protection for all users, devices, and applications and across all network edges." And over 580,000+ customers currently trust Fortinet with their cybersecurity solutions.įortinet Investor Presentation By the NumbersĪnd to put Fortinet in perspective versus other high-growth businesses, here is a look at a variety of critical metrics on high-growth businesses (those with at least 20% expected revenue growth, this year and next) sorted by market cap.Īs you can see, Fortinet is one of the few names on the list that has high growth AND positive free cash flow yield, very strong margins, a low cost of debt and very reasonable valuation metrics (price-to-sales and forward price-to-earnings) relative to its very strong growth rate. Its valuation multiple has been crushed, but its business and earnings keep growing-and likely will for many years to come.įortinet is a cybersecurity stock. In particular, the shares have sold off hard as the low-interest-rate bubble has burst, but unlike other "pandemic darlings" this one is actually very profitable and generates powerful cash flow (therefore it won't face the same growth-capital-raising challenges as others that will be paralyzed by higher borrowing rates, lower stock prices for new share issuances, and a slowed economy). The cybersecurity business we review in this report (Fortinet ( NASDAQ: FTNT)) is attractive for a variety of reasons, including its high growth, large total addressable market and attractive valuation.
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