Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2009
- Return on Equity (ROE) since 2009
- Current Ratio since 2009
- Price to Book Value (P/BV) since 2009
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MVA
Fortinet Inc., MVA 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Fortinet
- The market value exhibited a consistent upward trajectory from 2018 through 2021, increasing from approximately 14.44 billion USD to 51.65 billion USD. This represents more than a threefold increase over the four-year period, reaching a peak in 2021. However, in 2022, the market value experienced a decline to about 46.50 billion USD, indicating a partial reversal of the prior growth trend.
- Invested capital
- Invested capital showed a generally increasing pattern over the five-year span. Starting at roughly 1.89 billion USD in 2018, it rose modestly in 2019 and remained relatively stable in 2020. From 2020 onward, there was a stronger growth, with the invested capital reaching approximately 4.28 billion USD by the end of 2022. This suggests ongoing capital investment and resource allocation into the company’s operations.
- Market value added (MVA)
- The market value added, reflecting the difference between market value and invested capital, increased substantially from about 12.56 billion USD in 2018 to nearly 48.36 billion USD in 2021. This sharp rise corresponds with the significant increase in market value over the same period. In 2022, the MVA declined to approximately 42.22 billion USD, aligning with the reduction in market value, yet still maintaining a considerably large positive spread relative to invested capital.
- Overall trends and insights
- Over the period analyzed, the company demonstrated strong market growth and increased capital investment. The continuous rise in invested capital from 2020 to 2022 suggests efforts toward scaling or enhancing operational capacity. The peak in market value and MVA in 2021 followed by a decline in 2022 may reflect market volatility or external factors impacting valuation. Despite the recent decrease, the sustained high market value added indicates significant value creation relative to the capital invested.
MVA Spread Ratio
Fortinet Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog 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. | ||||||
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 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The MVA exhibited a consistent upward trend from 2018 to 2021, increasing from approximately 12.56 billion USD to nearly 48.36 billion USD. This sharp increase in MVA indicates significant growth in the market's valuation exceeding the invested capital during this period. However, a decline is observed in 2022, with MVA decreasing to around 42.22 billion USD, suggesting a reduction in the gap between market value and invested capital compared to the previous year.
- Invested Capital
- Invested capital showed a steady increase over the five-year period, rising from approximately 1.89 billion USD in 2018 to 4.28 billion USD in 2022. The growth appears consistent year over year, with a marked increase between 2020 and 2021, indicating continued capital investments or retained earnings reinvested into the company.
- MVA Spread Ratio
- The MVA spread ratio, which reflects the market's additional value relative to the invested capital expressed as a percentage, follows a similar pattern to MVA. It rises from 665.76% in 2018 to a peak of 1471.7% in 2021, illustrating that the market value considerably exceeded the invested capital during this timeframe. However, in 2022, the ratio declines to 985.98%, suggesting a decrease in the premium investors place on the company's capital base relative to prior years, though still maintaining a high spread overall.
- Overall Insights
- The data reflects strong growth in both market valuation and invested capital over the analyzed years, with the market value increasing at a higher rate than invested capital, as evidenced by the rising MVA and MVA spread ratio until 2021. The decline in 2022's MVA and MVA spread ratio indicates a contraction in market confidence or valuation relative to the capital invested, yet the values remain significantly above the initial periods. This signals that while the company has continued to grow its capital investments, its market valuation experienced some correction after reaching a peak in 2021.
MVA Margin
Fortinet Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog 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. | ||||||
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 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added (MVA) exhibited an overall upward trend from 2018 through 2021, increasing from approximately 12.56 billion US dollars to a peak of around 48.36 billion US dollars. This represents nearly a fourfold increase over the period. However, in 2022, the MVA decreased to approximately 42.22 billion US dollars, signaling a decline after several years of substantial growth.
- Adjusted Revenue
- Adjusted revenue showed consistent growth throughout the entire period from 2018 to 2022. Beginning at about 2.15 billion US dollars in 2018, revenue rose steadily each year to reach 5.60 billion US dollars by the end of 2022. The growth appears to accelerate post-2019, with larger year-on-year increments observed, particularly between 2020 and 2022.
- MVA Margin
- The MVA margin, representing the ratio of Market Value Added to Adjusted Revenue expressed as a percentage, displayed significant variability. From 2018 to 2021, this margin increased sharply from approximately 583.65% to a high of 1154.27%, indicating increasing value creation relative to revenue during this period. However, a notable decline occurred in 2022, with the margin falling to around 753.28%, suggesting a reduced market valuation relative to revenue despite continued revenue growth.
- Summary of Trends
- The data reveals strong growth dynamics in both market valuation and revenue over the observed years. The peak in MVA in 2021 coupled with the highest MVA margin indicates a phase of heightened market confidence or valuation premium relative to revenue. The subsequent decline in MVA and MVA margin in 2022, despite ongoing revenue expansion, could imply market revaluation or emerging challenges impacting perceived company value. This demonstrates a shift in market conditions or investor sentiment that warrants further investigation to understand underlying causes.