Ron Sharon

Cybersecurity and Technology Leader

Cybersecurity Stock And Long-Term Leader Fortinet Looks To Secure Breakout

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With the second-highest ranking among cybersecurity stocks behind Qualys (QLYS), Fortinet (FTNT) has secured a spot on the IBD Breakout Stocks Index. As it nears a buy point with earnings due May 4, FTNT stock scores a 97 Composite Rating.


The 97 Composite Rating means Fortinet is outpacing 97% of all stocks in terms of the most important stock-picking traits. Qualys leads with a 98 rating, while cloud and cybersecurity peers Mimecast (MIME), CrowdStrike (CRWD) and Palo Alto Networks (PANW) all earn strong ratings in Stock Checkup.

In addition to landing a spot in the Innovator IBD Breakout Opportunities ETF (BOUT), which tracks companies on the IBD Breakout Stocks Index, Fortinet is also on IBD Long-Term Leaders. Showing a track record of earnings stability, Fortinet joins cloud leaders Alphabet (GOOGL) and Microsoft (MSFT) on the list.

See All Stocks On The IBD Breakout Stocks Index

Fortinet Weaves Net Of Cybersecurity And Solid Earnings

Based in Silicon Valley, Fortinet secures the largest enterprise, service provider, and government organizations around the world. Through the Fortinet Security Fabric architecture, it delivers cybersecurity systems and strategies to address the most critical security challenges, whether in networked, application, cloud or mobile environments. With more than 500,000 customers, Fortinet ranks No.1 in the most security appliances shipped worldwide.

Over the last three years, Fortinet has delivered average annual earnings growth of 31%. For the same period, yearly revenue gains have averaged a solid 22%.

When the company reports Q1 numbers on May 4, analysts expect Fortinet to post a 1% decline in earnings growth, but see a 24% gain for the year. Analysts also forecast a 21% EPS increase in 2023.

FTNT Stock Gets Handle On New Buy Point

After breaking out to a new high at the end of last year, Fortinet pulled back, resetting its base count by undercutting the low in the prior chart pattern.

FTNT stock has now formed a handle on its current first-stage consolidation, showing a 353.08 buy point.

In a sign of market leadership, the relative strength line is approaching a 52-week high ahead of the potential breakout. The 50-day moving average has remained above the 200-day line, a positive sign during this year’s volatility in the stock market indexes.

As Fortinet looks to secure a fresh breakout, note how it edged above its 21-day line on Tuesday.

IBD Breakout Opportunities ETF

The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to essentially invest in the entire index in addition to or rather than buying the individual stocks. Learn more here about the ETF and Innovator funds.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


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