Fortinet Earnings: Investments in New Areas of Security Are Showing Early Signs of Success

We are maintaining our $77 fair value estimate for wide-moat Fortinet after the firm kicked off fiscal 2024 with a strong set of financial results and an improved outlook for the rest of the year. Along with strong quarterly results, we are impressed by Fortinet’s recently found emphasis on its Secure Access Service Edge and security operations businesses. As we think of Fortinet’s long-term market opportunity and economic moat, we find investments in adjacent security markets value-accretive. With its massive existing customer base of more than 700,000, Fortinet’s cross-selling motion can help increase its switching costs while providing the firm with additional levers for top-line growth.