Price to FCFE (P/FCFE)
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Free Cash Flow to Equity (FCFE)
Fortinet Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The financial data reveals a positive trend in the company's cash-related activities over the five-year period from 2018 to 2022.
- Net Cash Provided by Operating Activities
- This metric shows a consistent year-over-year increase, starting at $638.9 million in 2018 and rising steadily to $1.73 billion by 2022. The growth is particularly notable between 2020 and 2021, where the increase jumps from approximately $1.08 billion to $1.50 billion, indicating a strengthening operational cash generation capability. This trend suggests improving operational efficiency or revenue growth, leading to higher cash inflows from core business operations.
- Free Cash Flow to Equity (FCFE)
- Similarly, FCFE demonstrates an upward pattern from $585.9 million in 2018 to a peak of $2.19 billion in 2021. However, there is a decline in 2022, where FCFE drops to $1.45 billion. Despite this decrease, the 2022 figure remains significantly above the levels seen in the earlier years. The sharp rise through 2021 followed by a decline could indicate increased investments or changes in capital structure impacting the cash available to equity holders.
Overall, the data suggest a strong and improving underlying cash generation from operating activities, supporting growth and shareholder returns. The dip in FCFE in the final year warrants further examination to understand capital expenditures, financing activities, or other factors influencing cash allocation to equity holders.
Price to FCFE Ratio, Current
Fortinet Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Fair Isaac Corp. | |
| International Business Machines Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| ServiceNow Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| P/FCFE, Sector | |
| Software & Services | |
| P/FCFE, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Fortinet Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/FCFE, Sector | ||||||
| Software & Services | ||||||
| P/FCFE, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Fortinet Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
- Share Price
- The share price of the company exhibited a consistent upward trend from 2018 through 2021, increasing from $17.58 to a peak of $64.99. In 2022, the share price declined to $58.86, marking a decrease after several years of growth but still remaining significantly above the initial value in 2018.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share showed a steady increase from 2018 to 2021, rising from $0.69 to $2.72. However, in 2022, it experienced a contraction to $1.85, indicating a reduction in cash flow available to equity shareholders compared to the previous year but still maintaining a higher level relative to the earlier years.
- Price to FCFE Ratio (P/FCFE)
- The P/FCFE ratio was relatively stable around 25.6 in 2018 and 2019, rose to 29.3 in 2020, then decreased to 23.85 in 2021 before increasing sharply to 31.84 in 2022. This fluctuation suggests varying market valuations relative to the company's free cash flow, with the market showing higher premium valuation in 2020 and especially in 2022 despite the decline in FCFE per share.
- Summary
- The data reflects a period of growth in both share price and free cash flow per share until 2021, followed by a notable decline in 2022 for both metrics. Despite the drop in share price and FCFE per share in 2022, the P/FCFE ratio increased, indicating a relatively higher valuation multiple adopted by the market in that year. This could suggest investor expectations of future cash flow improvements or other factors influencing valuation beyond current cash flow levels.