News Summary SUNNYVALE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Fortinet® (NASDAQ:FTNT), the global cybersecurity leader driving the convergence of networking and security, today announced the FortiGate 70G, FortiGate 50G, and FortiGate 30G, the latest G series next-generation firewalls (NGFWs) designed to meet the evolving technology and business demands of today's distributed enterprises. Powered by Fortinet's proprietary ASIC technology and the unified Fortinet operating system, FortiOS, the FortiGate ...

Have you been paying attention to shares of Fortinet (FTNT) ? Shares have been on the move with the stock up 6.5% over the past month. The stock hit a new 52-week high of $102.17 in the previous session. Fortinet has gained 6.8% since the start of the year compared to the 33.9% move for the Zacks Computer and Technology sector and the 49.6% return for the Zacks Internet - Software industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, as it hasn't misse ...

Core Insights - Fortinet Inc (NASDAQ:FTNT) reached a record high of $102.17, surpassing the $100 resistance level, with potential for further gains as it historically performs well in February [1] - The stock has historically finished February higher nine out of the last ten years, averaging a 9% gain, which could push shares above $111, contributing to a 55% year-over-year increase [2] - There is a prevailing pessimism among analysts, with 23 out of 37 maintaining a "hold" or worse rating, while the 12-month consensus price target is $98.84, slightly below current levels [3] Options Activity - The popularity of put options has increased, with a 10-day put/call volume ratio of 1.79, ranking higher than 91% of readings from the past year [4] Earnings Outlook - The company is expected to experience volatility around its earnings report scheduled for February 6, but its recent post-earnings performance has been positive, with the stock closing higher after three quarterly reports last year, including a notable 25.4% increase in August [5]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: Fortinet (FTNT) - Fortinet currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating a favorable outlook for the stock [3][4]. - The stock has shown a price increase of 2.83% over the past week, outperforming the Zacks Internet - Software industry, which rose by 1.86% during the same period [6]. - Over the past quarter, Fortinet shares have increased by 22.74%, and over the last year, they have gained 45.63%, significantly outperforming the S&P 500's increases of 3.88% and 24.54%, respectively [7]. Trading Volume - Fortinet's average 20-day trading volume is 3,401,035 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - In the last two months, three earnings estimates for Fortinet have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $2.20 to $2.24 [10]. - For the next fiscal year, six estimates have moved upwards with no downward revisions, indicating positive sentiment regarding future earnings [10]. Conclusion - Considering the positive momentum indicators and earnings outlook, Fortinet is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for near-term investment [12].

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and invest confidently in the stock market [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, aiding investors in selecting stocks likely to outperform the market in the next 30 days [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score focuses on a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score helps investors capitalize on price trends, using factors like one-week price change and monthly earnings estimate changes [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for evaluating stocks based on value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that utilizes earnings estimate revisions to simplify portfolio building [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - Investors should prioritize stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9] - Stocks with lower ranks but high Style Scores may still face downward earnings forecasts, increasing the risk of price declines [10] Company Spotlight: Fortinet (FTNT) - Fortinet, headquartered in Sunnyvale, CA, specializes in network security solutions and holds a Zacks Rank of 2 (Buy) with a VGM Score of B [11] - The company has a Momentum Style Score of B, with shares increasing by 1.7% over the past four weeks [11] - Recent analyst revisions have raised Fortinet's earnings estimate for fiscal 2024 by $0.04 to $2.24 per share, with an average earnings surprise of 23.6% [12]

Core Insights - Fortinet's shares have increased by 68.8% over the past six months, significantly outperforming the Zacks Computer & Technology sector's growth of 14.8% and the Zacks Internet - Software industry's return of 31.5% [1] - The company has outperformed key competitors in the cybersecurity market, including Cisco Systems, Palo Alto Networks, and Check Point Software Technologies, which saw share price increases of 31.5%, 16.5%, and 6% respectively [2] Company Performance - Strong demand for Fortinet's cybersecurity solutions is attributed to the robust Fortinet Security Fabric platform and its cloud-based offerings, contributing to the positive movement in share price [3] - Fortinet's Secure Networking solutions integrate networking and security through FortiOS, delivering up to 5x better performance than competitors [4] - The flagship product, FortiGate, continues to see robust adoption, significantly driving revenue growth [5] Business Segments - In Q3 2024, Unified SASE accounted for 23% of Fortinet's business, with a 130% increase in the pipeline, highlighting the company's unique position in offering a complete SASE solution [6] - A notable upsell deal in Q3 2024 involved a retail customer expanding its SD-WAN deployment to include FortiSASE for 16,000 users, showcasing the value of the FortiOS platform [8] - An eight-figure deal with a multinational bank was secured to protect its hybrid architecture, emphasizing Fortinet's strength in safeguarding large-scale enterprises [9] Financial Outlook - For Q4 2024, Fortinet expects revenues between $1.56 billion and $1.62 billion, with non-GAAP earnings projected at 58-62 cents per share, indicating a year-over-year revenue growth of 12.59% [10] - For the full year 2024, revenues are projected between $5.86 billion and $5.92 billion, with non-GAAP earnings expected to be $2.20-$2.28 per share, reflecting an 11.01% year-over-year growth in revenues [12] - Fortinet has a history of strong quarterly performance, with earnings surpassing estimates in the last four quarters, averaging a surprise of 23.58% [12] Strategic Initiatives - Fortinet plans to announce GenAI for FortiAI in early 2025, aiming to enhance AI-based security operations and integrate generative AI across its product portfolio [7] - The company's cutting-edge AI security solutions and expanding customer base position it for strong growth, currently holding a Zacks Rank 2 (Buy) and a Growth Score of A [13]

Group 1 - Fortinet (NASDAQ: FTNT) is considered a strong investment opportunity despite competition in the cybersecurity sector from companies like CrowdStrike (CRWD) and Palo Alto Networks (PANW) [1] - The market is perceived to be underestimating Fortinet's potential, indicating a possible undervaluation [1] Group 2 - The author, Motti Sapir, has over 15 years of experience in financial markets and focuses on simplifying complex financial concepts [1] - The goal is to help investors understand market trends and make informed investment decisions [1]

Group 1: Company Performance - Fortinet (FTNT) closed at $98.24, with a daily increase of +1.07%, outperforming the S&P 500's gain of 0.61% [1] - Over the previous month, Fortinet's shares experienced a loss of 0.62%, underperforming compared to the Computer and Technology sector's gain of 1.24% and the S&P 500's gain of 2.08% [1] Group 2: Upcoming Financial Results - Fortinet is set to announce its earnings on February 6, 2025, with projected EPS of $0.60, indicating a 17.65% increase year-over-year [2] - The consensus estimate for Fortinet's revenue is $1.59 billion, reflecting a 12.59% rise from the same quarter last year [2] Group 3: Analyst Estimates and Ratings - Recent changes to analyst estimates for Fortinet suggest a favorable outlook on the company's business health and profitability [3] - The Zacks Rank system currently rates Fortinet as 1 (Strong Buy), with a historical average annual return of +25% for 1 stocks since 1988 [5] Group 4: Valuation Metrics - Fortinet has a Forward P/E ratio of 40.74, which is a premium compared to its industry's Forward P/E of 29.01 [5] - The PEG ratio for Fortinet is currently 2.19, aligning with the average PEG ratio of the Internet - Software industry [6] Group 5: Industry Ranking - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 41, placing it in the top 17% of over 250 industries [6][7]

Company Analysis - Fortinet's stock price ended at $93 83, reflecting a -0 77% shift from the previous trading day, underperforming the S&P 500's daily gain of 0 16% [4] - The stock has dropped by 3 46% in the past month, underperforming the Computer and Technology sector's loss of 1 29% and the S&P 500's loss of 2 2% [4] - Fortinet holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate moving 1 07% higher over the past month [2] - The company is forecasted to report an EPS of $0 60 in its upcoming earnings disclosure on February 6, 2025, a 17 65% increase from the prior year, with projected revenue of $1 59 billion, reflecting a 12 59% rise [7] - Fortinet has a Forward P/E ratio of 39 95, trading at a premium compared to the industry average of 28 07 [6] - The company's PEG ratio is 2 15, slightly below the Internet - Software industry average of 2 18 [8] Industry Analysis - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 29, placing it in the top 12% of all 250+ industries [3] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [3] Analyst Estimates and Market Trends - Positive revisions to analyst estimates for Fortinet signify optimism regarding the company's business and profitability [1] - Estimate changes are directly correlated with near-term stock prices, forming the basis of the Zacks Rank system [5]

Core Viewpoint - Fortinet's stock has increased by 51.4% over the past year, driven by strategic partnerships and strong financial performance, but investors should consider valuation concerns [1]. Group 1: Strategic Partnerships and Enterprise Growth - Fortinet's partnership with the Pittsburgh Steelers for the 2024-2025 season highlights its expanding enterprise presence and showcases its Security Fabric platform capabilities [4]. - The partnership includes the implementation of FortiGate Next-Generation Firewalls and FortiSwitch Ethernet switches, enhancing security for corporate operations and public Internet access [4]. - This 15-year relationship adds to Fortinet's portfolio of enterprise clients, including recent wins with the Vancouver Canucks, indicating strong customer retention and scalability [4]. Group 2: Financial Performance and Market Metrics - In Q3 2024, Fortinet reported total revenues of $1.508 billion, a 13% increase year-over-year [5]. - Service revenues, which account for 69% of total revenues, grew by 19% to $1.034 billion, while product revenues increased by 1.7% [5]. - The company achieved record gross margins of 83.2% and operating margins of 36.1%, reflecting strong operational efficiency [5]. Group 3: Competitive Landscape and Challenges - The cybersecurity market is highly competitive, with Fortinet facing challenges from established players like Palo Alto Networks, Cisco Systems, and others [6]. - Fortinet differentiates itself by being the only vendor using a single operating system across five secure networking solutions in the Gartner Magic Quadrant [6]. - Continuous innovation is essential for Fortinet to maintain its technological edge in the competitive landscape [6]. Group 4: Growth Catalysts and Innovation - Fortinet's expanded Security Operations portfolio, including Lacework FortiCNAPP and FortiDLP, represents a new $20 billion market opportunity [10]. - The AI-driven Security Operations business experienced 32% billings growth, contributing 10.5% to total business [10]. - Unified SASE billings grew by 14%, with security service edge billings increasing by 220% and pipeline growth of 130%, indicating strong market momentum [10]. Group 5: Macroeconomic Considerations - Potential headwinds include economic slowdowns and changes in corporate IT spending patterns, which could impact Fortinet's growth [11]. - The company's premium valuation suggests limited room for error in navigating these challenges while maintaining growth rates [11]. Group 6: Investment Outlook - Fortinet's solid fundamentals, market leadership, and strong partnerships present an intriguing investment opportunity [12]. - The expected refresh cycle of FortiGate products and expansion in AI-driven security solutions could drive additional growth [13]. - The Zacks Consensus Estimate for 2025 revenues is $6.6 billion, indicating a year-over-year growth of 10.07% [14].