Section 1: Company Overview and Fundamentals Insights

Company Overview: Fortinet, Inc. (FTNT) provides cyber security solutions to a variety of organizations, including enterprises, communication service providers, security service providers, government organizations and small businesses. Its product offerings consist of its core platform network security products and its enhanced platform technology products, which are offered in a range of forms spanning physical appliances, virtual appliances, software, and cloud-hosted services.

 Kalkine’s US American Tech Report covers the Investment Highlights, Management Insights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks:

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~43.42% of the total shareholding. Xie (Michael). and The Vanguard Group, Inc. hold maximum stakes in the company at ~8.85% and ~8.62%, respectively.

1.4 Key Metrics:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Business Updates:

 

2.2 Q2FY23 Results Highlights (for the 3 months ended 30 June 2023): Below mentioned are some key financial highlights:   

2.3 Historical Financial Trend

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

Stock Performance:

• The stock has corrected by 18.09% in the last one month while on the other hand has given a return of 25.37% in the last year.
• The stock is leaning towards its lower band of its 52-week range of USD 81.24 and 52-week low price of USD 42.61. Post the announcement of Q2FY23 results the stock corrected by 19.94% due to lower than expected earnings and financials.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 43.43.

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 1 September 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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