Fortinet (NASDAQ: FTNT) and Verifone Systems (NYSE:PAY) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.
Volatility and Risk
Fortinet has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Verifone Systems has a beta of 1.95, indicating that its share price is 95% more volatile than the S&P 500.
Valuation and Earnings
This table compares Fortinet and Verifone Systems’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fortinet||$1.38 billion||5.03||$142.32 million||$0.48||82.29|
|Verifone Systems||$1.86 billion||1.15||$217.75 million||($1.62)||-11.74|
Verifone Systems has higher revenue and earnings than Fortinet. Verifone Systems is trading at a lower price-to-earnings ratio than Fortinet, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
69.2% of Fortinet shares are held by institutional investors. 17.0% of Fortinet shares are held by company insiders. Comparatively, 1.2% of Verifone Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Fortinet and Verifone Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and price targets for Fortinet and Verifone Systems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Fortinet presently has a consensus price target of $43.59, indicating a potential upside of 10.35%. Verifone Systems has a consensus price target of $19.21, indicating a potential upside of 1.02%. Given Fortinet’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Fortinet is more favorable than Verifone Systems.
Fortinet beats Verifone Systems on 10 of the 14 factors compared between the two stocks.
Fortinet Company Profile
Fortinet, Inc. is a network security company. The Company provides cyber security solutions to a range of enterprises, service providers and government organizations across the world. Its network security solution consists of FortiGate physical, virtual machine and cloud platforms, which provide integrated security and networking functions to protect data, applications and users from network-and content-level security threats. The Company’s product offerings consist of its FortiGate product family, along with its FortiManager central management and FortiAnalyzer central logging and reporting product families. Its cybersecurity platform includes a range of products, which include its FortiMail e-mail security, FortiSandbox advanced threat protection (ATP), FortiWeb Web application firewall, FortiDDos and FortiDB database security appliances, as well as its FortiClient endpoint security software, FortiAP secure wireless access points and FortiSwitch secure switch connectivity products.
Verifone Systems Company Profile
VeriFone Systems, Inc. offers payments and commerce solutions. The Company is engaged in designing, manufacturing, marketing and supplying a range of payment solutions and complementary services. It provides solutions and services for the retail point-of-sale (POS) that enable various forms of commerce. The Company’s segments include Verifone Systems and Verifone Services. The Verifone Systems segment delivers point of sale electronic payment devices that run the operating systems, security and encryption software, and certified payment software for both payments and commerce. The Verifone Services segment delivers device-related leasing and maintenance, payment transaction routing and reporting, and commerce based services, such as advertising on digital screens. The Company operates in various sectors, such as financial services, retail, petroleum, restaurant, hospitality, taxi, transportation and healthcare.
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