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What's in the Offing for Fortinet's (FTNT) Q4 Earnings?

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Fortinet, Inc. (FTNT - Free Report) is slated to report fourth-quarter 2020 results on Feb 4.

The company anticipates quarterly revenues of $710-$730 million. The Zacks Consensus Estimate for revenues is pegged at $722.37 million, calling for year-over-year growth of 17.57%.

Non-GAAP earnings per share are projected at 95-97 cents. The Zacks Consensus Estimate is pegged at 96 cents per share, indicating a year-on-year increase of 26.32%.

The company’s earnings surpassed the consensus mark in the trailing four quarters, the average surprise being 16.89%.

Let’s see how things have shaped up for the upcoming announcement.

Fortinet, Inc. Price and EPS Surprise

Fortinet, Inc. Price and EPS Surprise

Fortinet, Inc. price-eps-surprise | Fortinet, Inc. Quote

Factors at Play

Fortinet’s fourth-quarter performance is expected to have benefited from robust momentum in FortiGate virtual machines, which is driving its private and public cloud billings. Management expects billings in a band of $890-$920 million for the fourth quarter.

The rapid adoption of FortiGate-based secure SD-WAN offerings is likely to have aided the company’s Product segment. The Zacks Consensus Estimate for Product revenues in the December-end quarter is pinned at $268 million, suggesting 12% year-over-year growth.

Also, FortiGuard security subscriptions and FortiCare technical support services are likely to have maintained solid traction, supporting the company’s Services segment. The Zacks Consensus Estimate for quarterly Services revenues is pinned at $454 million, calling for 20.7% year-over-year growth.

Besides, the company is expected to have benefited from its IoT offerings with the Forti- ASIC SPU technology, which provides a cost and performance advantage over its competitors.

However, capital expenditures are expected to be sequentially higher. Management had estimated capital expenditures for the fourth quarter between $40 million and $50 million, in the company’s last earnings call.

What Our Model Says

Our proven model does not predict an earnings beat for Fortinet this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Fortinet currently has a Zacks Rank of 5 (Strong Sell) and an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +4.82% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Qorvo, Inc. (QRVO - Free Report) has an Earnings ESP of +0.78% and a Zacks Rank of 2, currently.

Facebook, Inc. has an Earnings ESP of +0.49% and currently, a Zacks Rank of 3.

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