Reviewing 21Vianet Group (VNET) and Fortinet (FTNT)

21Vianet Group (NASDAQ: VNET) and Fortinet (NASDAQ:FTNT) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of current ratings and target prices for 21Vianet Group and Fortinet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
21Vianet Group 0 1 1 0 2.50
Fortinet 1 10 12 0 2.48

21Vianet Group presently has a consensus target price of $8.50, suggesting a potential upside of 4.04%. Fortinet has a consensus target price of $47.48, suggesting a potential downside of 3.23%. Given 21Vianet Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe 21Vianet Group is more favorable than Fortinet.

Valuation and Earnings

This table compares 21Vianet Group and Fortinet’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
21Vianet Group $524.53 million 1.74 -$91.25 million ($2.91) -2.81
Fortinet $1.49 billion 5.71 $31.39 million $0.17 288.59

Fortinet has higher revenue and earnings than 21Vianet Group. 21Vianet Group is trading at a lower price-to-earnings ratio than Fortinet, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

23.3% of 21Vianet Group shares are owned by institutional investors. Comparatively, 68.7% of Fortinet shares are owned by institutional investors. 17.0% of Fortinet shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

21Vianet Group has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, Fortinet has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Profitability

This table compares 21Vianet Group and Fortinet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
21Vianet Group -57.80% -3.50% -1.62%
Fortinet 2.10% 11.77% 4.20%

Summary

Fortinet beats 21Vianet Group on 11 of the 14 factors compared between the two stocks.

21Vianet Group Company Profile

21Vianet Group, Inc. is a carrier-neutral Internet data center services provider. The Company hosts its customers’ servers and networking equipment and provides interconnectivity. The Company also provides managed network services to enable customers to deliver data across the Internet through its data transmission network and smart routing technology. The Company provides value-added services, such as content delivery network (CDN) services, virtual private network (VPN) services and last-mile wired broadband services. It offers public cloud services, private cloud and hybrid services. In addition, the Company also offers container-based data center service. The Company’s service offerings include hosting and related services, and managed network services. The Company provides hosting and related services to house servers and networking equipment in its data centers and connects them through its data transmission network, and offers other hosting related value-added services.

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.

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