Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Current Valuation Ratios
Fortinet Inc., current price multiples
| Fortinet Inc. | 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. | Software & Services | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||
| Current share price (P) | |||||||||||||||||||||
| No. shares of common stock outstanding | |||||||||||||||||||||
| Growth rate (g) | |||||||||||||||||||||
| Earnings per share (EPS) | |||||||||||||||||||||
| Next year expected EPS | |||||||||||||||||||||
| Operating profit per share | |||||||||||||||||||||
| Sales per share | |||||||||||||||||||||
| Book value per share (BVPS) | |||||||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||||||
| Price to earnings (P/E) | |||||||||||||||||||||
| Price to next year expected earnings | |||||||||||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||||||||||
| Price to operating profit (P/OP) | |||||||||||||||||||||
| Price to sales (P/S) | |||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Fortinet Inc., historical price multiples
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
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).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio exhibited an overall upward trend from 45.15 in 2018, peaking at 86.12 in 2021, before declining to 53.83 in 2022. This pattern suggests an initial increase in market valuation relative to earnings, followed by a moderation in valuation in the most recent year.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio showed fluctuations over the period. Starting at 64.93 in 2018, it decreased to 52.77 in 2020, increased sharply to 80.35 in 2021, and then fell significantly to 47.6 in 2022. These movements reflect variability in market valuation relative to operating profit, with a notable peak in 2021 and a substantial correction thereafter.
- Price to Sales (P/S) Ratio
- There was a general increase in the price to sales ratio from 8.33 in 2018, reaching a high of 15.64 in 2021. Subsequently, it declined to 10.45 in 2022. This indicates stronger market valuation against sales up to 2021, followed by a decrease, signaling shifting investor sentiment or changes in sales dynamics.
- Price to Book Value (P/BV) Ratio
- The ratio decreased slightly from 14.85 in 2018 to 13.87 in 2019, then escalated significantly to 32.78 in 2020 and further to 66.85 in 2021. Data for 2022 is not available. This sharp rise points to a substantial increase in market valuation relative to book value during the years 2020 and 2021, possibly reflecting a growing premium on the company’s net assets.
Price to Earnings (P/E)
Fortinet Inc., historical P/E 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$) | ||||||
| Net income attributable to Fortinet, Inc. (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| 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/E Ratio, Sector | ||||||
| Software & Services | ||||||
| P/E Ratio, 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.
2 2022 Calculation
EPS = Net income attributable to Fortinet, Inc. ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Fortinet Inc. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a clear upward trend over the observed period, rising from $17.58 at the end of 2018 to a peak of $64.99 at the end of 2021. However, there was a decline in 2022, with the price decreasing to $58.86. Despite this drop, the share price at the end of 2022 remained significantly higher than the levels seen at the beginning of the period.
- Earnings Per Share (EPS)
- EPS values showed consistent growth throughout the period under review. Starting at $0.39 in 2018, EPS slightly decreased to $0.38 in 2019 but then increased steadily each year to reach $1.09 by 2022. This upward trajectory suggests improving profitability on a per-share basis over time.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio exhibited volatility with an overall increasing trend until 2021, where it reached a high of 86.12. It started at 45.15 in 2018, rose gradually to above 50 by 2020, and peaked in 2021. In 2022, the P/E ratio decreased notably to 53.83. This pattern implies that the market’s valuation of future earnings grew significantly through 2021 but became more conservative in 2022.
- General Insights
- The steady EPS growth alongside rising share prices until 2021 indicates enhanced earnings performance supported by favorable market sentiment. The notable increase in the P/E ratio suggests investor optimism and growing expectations for future earnings during this period. The decline in share price and P/E ratio in 2022 could reflect market recalibration or external factors influencing investor confidence, despite ongoing improvements in earnings.
Price to Operating Profit (P/OP)
Fortinet Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| 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/OP Ratio, Sector | ||||||
| Software & Services | ||||||
| P/OP Ratio, 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.
2 2022 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Fortinet Inc. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a pronounced upward trend from 2018 through 2021, increasing from $17.58 to $64.99. However, in 2022, there was a decline to $58.86, indicating some volatility after a period of sustained growth.
- Operating Profit per Share
- This metric consistently increased over the five-year span, starting at $0.27 in 2018 and reaching $1.24 in 2022. The steady rise suggests improving profitability on a per-share basis.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio fluctuated during the period. It initially decreased from 64.93 in 2018 to 52.77 in 2020, suggesting that the stock price was becoming more aligned with the company's operating profit growth. In 2021, the ratio surged to 80.35, indicating that the share price outpaced the growth in operating profit per share. By 2022, the ratio fell sharply to 47.6, reflecting either a relative decrease in share price or a notable increase in operating profit per share, improving valuation metrics.
Price to Sales (P/S)
Fortinet Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenue (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| 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/S Ratio, Sector | ||||||
| Software & Services | ||||||
| P/S Ratio, 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.
2 2022 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Fortinet Inc. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a consistent upward trend from 2018 to 2021, increasing from $17.58 to $64.99. However, in 2022, the share price experienced a decline to $58.86, indicating some volatility after a period of strong growth.
- Sales Per Share
- Sales per share showed steady growth throughout the entire period, rising from $2.11 in 2018 to $5.63 in 2022. This reflects increasing revenue generation on a per-share basis each year, suggesting overall business expansion and improved sales performance.
- Price-to-Sales (P/S) Ratio
- The P/S ratio generally increased from 8.33 in 2018, reaching a peak of 15.64 in 2021, indicating growing market valuation relative to sales. In 2022, the ratio decreased to 10.45, which could reflect either a relative decline in market valuation or a more rapid increase in sales compared to the share price decline.
- Overall Insights
- The data reveals robust growth in sales per share, signaling strong operational performance. The share price trajectory largely mirrored this trend, with significant appreciation until 2021 followed by a moderate correction in 2022. The fluctuations in the P/S ratio suggest changes in market sentiment or valuation metrics after 2021, potentially driven by external market conditions or company-specific factors.
Price to Book Value (P/BV)
Fortinet Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total Fortinet, Inc. stockholders’ equity (deficit) (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| 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/BV Ratio, Sector | ||||||
| Software & Services | ||||||
| P/BV Ratio, 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.
2 2022 Calculation
BVPS = Total Fortinet, Inc. stockholders’ equity (deficit) ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Fortinet Inc. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited an overall upward trend from 2018 to 2021, starting at $17.58 and peaking at $64.99 in 2021. However, in 2022, the share price declined to $58.86, indicating a decrease from the prior year but still maintaining a significant increase compared to the earlier years. This suggests strong investor interest and positive market valuation until 2021, followed by a moderate correction in 2022.
- Book Value per Share (BVPS)
- The book value per share showed some volatility, increasing from $1.18 in 2018 to $1.53 in 2019, then declining to $1.05 in 2020 and further down to $0.97 in 2021. By 2022, the BVPS became negative at -$0.36. This downward trend, culminating in a negative book value, signals deteriorating net asset value on a per-share basis, possibly reflecting increased liabilities or accounting adjustments over the period.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio followed an escalating trend through 2021, beginning at 14.85 in 2018, decreasing slightly to 13.87 in 2019, then surging to 32.78 in 2020 and climbing further to 66.85 in 2021. Data for 2022 is not available. This sharp increase highlights a growing disparity between the market price and the book value, reflecting high market expectations and potential overvaluation relative to the company's net assets during these years.