Name: Fortinet Inc. (NASDAQ:FTNT) | Enterprise Value (EV)
Creator: Stock Analysis on Net

Current EV
Historical EV

Fortinet Inc., current enterprise value calculation

Current share price (P)	$66.08
No. shares of common stock outstanding	785,196,153
US$ in thousands
Common equity (market value)¹	51,885,762)
Add: Non-controlling interests (per books)	—)
Total equity	51,885,762)
Add: Long-term debt (per books)	990,400)
Total equity and debt	52,876,162)
Less: Cash and cash equivalents	1,682,900)
Less: Short-term investments	502,600)
Less: Marketable equity securities	25,500)
Enterprise value (EV)	50,665,162)

Based on: 10-K (reporting date: 2022-12-31).

¹ Common equity (market value) = Share price × No. shares of common stock outstanding
= 66.08 × 785,196,153

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Fortinet Inc., EV calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Share price^1, 2	$58.86	$64.99	$34.39	$21.25	$17.58
No. shares of common stock outstanding¹	784,066,289	804,077,230	815,954,595	862,573,610	853,168,355
US$ in thousands
Common equity (market value)³	46,150,142)	52,256,979)	28,060,679)	18,329,689)	14,998,700)
Add: Non-controlling interests (book value)	—)	16,700)	—)	—)	—)
Total equity	46,150,142)	52,273,679)	28,060,679)	18,329,689)	14,998,700)
Add: Long-term debt (book value)	990,400)	988,400)	—)	—)	—)
Total equity and debt	47,140,542)	53,262,079)	28,060,679)	18,329,689)	14,998,700)
Less: Cash and cash equivalents	1,682,900)	1,319,100)	1,061,800)	1,222,500)	1,112,400)
Less: Short-term investments	502,600)	1,194,000)	775,500)	843,100)	537,200)
Less: Marketable equity securities	25,500)	38,600)	—)	—)	—)
Enterprise value (EV)	44,929,542)	50,710,379)	26,223,379)	16,264,089)	13,349,100)

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 Closing price as at the filing date of Fortinet Inc. Annual Report.

³ 2022 Calculation
Common equity (market value) = Share price × No. shares of common stock outstanding
= 58.86 × 784,066,289

The financial trajectory from 2018 to 2022 is characterized by a period of aggressive valuation expansion followed by a moderate correction. A strong upward trend in both market capitalization and enterprise value is evident through 2021, with a subsequent decline observed in 2022.

Equity Market Valuation Trends: Common equity market value experienced substantial growth, rising from 14.99 billion US$ in 2018 to a peak of 52.25 billion US$ in 2021. This represents a significant increase in shareholder valuation over a three-year period. However, this trend reversed in 2022, with the market value retreating to 46.15 billion US$.
Enterprise Value (EV) Analysis: Enterprise value followed a growth trajectory closely mirroring that of the market equity, increasing from 13.34 billion US$ in 2018 to a peak of 50.71 billion US$ in 2021. The subsequent reduction to 44.92 billion US$ in 2022 indicates a contraction in the total valuation of the business operations.
Capital Structure and Net Cash Position: A consistent gap is observed where the enterprise value remains lower than the market value of common equity across all reported years. This pattern indicates that the organization maintains a significant net cash position, as the cash and cash equivalents held exceed the total debt, thereby lowering the overall enterprise value relative to the equity market value.
Valuation Volatility and Correction: The period between 2020 and 2021 saw the most rapid escalation in value, with enterprise value nearly doubling from 26.22 billion US$ to 50.71 billion US$. The decline observed in 2022 suggests a valuation correction, with enterprise value decreasing by approximately 11.4% from its 2021 peak.

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Fortinet Inc. (NASDAQ:FTNT)

Enterprise Value (EV)

Current Enterprise Value (EV)

Historical Enterprise Value (EV)