Bullish signal on Fortinet (FTNT) after earnings
The Tickeron AI Trend Prediction tool generated a bullish signal on application software firm Fortinet (Nasdaq: FTNT) on February 7 and that was the day after the company reported earnings. The prediction came with a 70% confidence level and previous predictions on Fortinet have been accurate 68% of the time.
The company reported earnings per share of $0.59 and that exceeded the $0.51 consensus estimate. Fortinet also beat on the top line with revenue of $507 million while the estimate was for $496 million.
Something that stood out about Fortinet’s earnings report from some of the other tech companies was how China was impacting the company. Many other tech firms have lowered forecast and have cited the economic slowdown in China or the trade war. Fortinet doesn’t seem to have been phased by it.
The bullish signal from the AI prediction tool if for a gain of 2% over the next week, but looking at the weekly chart leads me to believe that we could see an even greater move to the upside.
The stock pulled down to its 52-week moving average during the fourth quarter, but it seemed to use the trend line as support and has since reversed. The stock has moved higher in each of the last three weeks, but it hasn’t shot up so much that the overbought/oversold indicators have jumped up to overbought territory.
We see that the 10-week RSI is at 60.17 currently and the weekly stochastic readings are at 71.22 and 53.65. Even if the stochastic readings do move in to overbought territory, it isn’t necessarily a bad sign. You can see that the readings were above the 80 level from November ’17 through September ’18.
Fortinet is one of the recommended holdings in the 20/20 Portfolio, my model portfolio here on Tickeron.
FTNT's Stochastic Oscillator stays in oversold zone for 1 day
Be on the lookout for a price bounce soon.
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where FTNT advanced for three days, in of 357 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 322 cases where FTNT Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for FTNT moved out of overbought territory on October 17, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 45 similar instances where the indicator moved out of overbought territory. In of the 45 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on October 24, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on FTNT as a result. In of 94 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for FTNT turned negative on October 23, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 51 similar instances when the indicator turned negative. In of the 51 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FTNT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
FTNT broke above its upper Bollinger Band on October 09, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. FTNT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock better than average.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: FTNT's P/B Ratio (555.556) is slightly higher than the industry average of (30.698). P/E Ratio (46.445) is within average values for comparable stocks, (161.895). Projected Growth (PEG Ratio) (1.825) is also within normal values, averaging (2.738). Dividend Yield (0.000) settles around the average of (0.083) among similar stocks. P/S Ratio (10.070) is also within normal values, averaging (55.771).
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a provider of threat management and network security solutions
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