Fortinet’s Strong Performance Outshines Market Amid Solid Earnings

With a market capitalization of $79.7 billion, Fortinet, Inc. (FTNT) specializes in cybersecurity and offers a range of networking and security solutions to enterprises, service providers, and government sectors. Headquartered in Sunnyvale, California, the company’s portfolio includes network security, cloud protection, endpoint security, Secure Access Service Edge (SASE), zero trust access, and security operations.

Stock Performance Compared to Market

Over the past 52 weeks, Fortinet’s stock has significantly outperformed the broader market. The company’s shares have increased by 64%, while the S&P 500 Index ($SPX) has observed a gain of just 11.7%. Additionally, year-to-date, Fortinet is up 10.3%, contrasting with the 4.7% decline experienced by the SPX.

Comparison with Cybersecurity ETF

Further analysis shows that Fortinet has also surpassed the Xtrackers Cybersecurity Select Equity ETF (PSWD), which has seen a growth of 15% over the last 52 weeks and a modest 2.7% increase year-to-date.

Recent Earnings Report

Fortinet’s shares rose 2.8% the day following its better-than-expected Q4 earnings release on February 6. The company reported revenue of $1.7 billion, marking a 17.3% increase from the previous year and exceeding consensus estimates by 4.4%. The adjusted earnings per share (EPS) were $0.74, reflecting a substantial 45.1% growth from last year and surpassing forecasts by 23.3%. This robust performance stemmed from solid growth in both service and product revenues, alongside a record-high adjusted operating margin of 39.2%, which saw a notable improvement of 720 basis points.

Future Projections

Looking ahead, Fortinet anticipates generating revenue between $6.7 billion and $6.9 billion for fiscal 2025, with adjusted EPS expected to range from $2.41 to $2.47. Analysts project the company’s EPS to grow 1% year-over-year to $2.11 by the end of 2025. Fortinet has a strong track record, having exceeded consensus estimates in each of the last four quarters.

Analyst Ratings Overview

Among the 40 analysts covering the stock, the consensus rating stands at “Moderate Buy,” reflecting 13 “Strong Buy,” 25 “Hold,” and two “Strong Sell” ratings. This represents a slight decrease in bullish sentiment compared to three months ago when 14 analysts recommended a “Strong Buy,” and one suggested a “Strong Sell.”

On April 24, Cantor Fitzgerald maintained a “Neutral” rating on FTNT, although it revised its price target down to $100. The mean price target of $111.29 represents a potential upside of 6.8% from Fortinet’s current stock price. In contrast, the highest price target of $135 suggests a potential upside of 29.5%.

On the date of publication, Neharika Jain did not hold positions in any of the securities mentioned in this article. All information is provided for informational purposes only. For more information, please view the Barchart Disclosure Policy here.

The views expressed herein are the author’s and do not necessarily reflect those of other organizations.