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Fortinet Inc FTNT

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5-Star Price

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Economic Moat

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Capital Allocation

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More Than Just a Forti-Great Q1 for Fortinet With Broad-Based Strength; Raising FVE to $185

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

We are raising our fair value estimate for narrow-moat Fortinet to $185 from $140 after its first quarter results due to increased confidence in expecting a more prolonged period of strong growth, especially from areas outside of core firewall use cases. Even with lofty expectations coming into the quarter due to strong secular tailwinds in cybersecurity and networking infrastructure changes, Fortinet exceeded our anticipations for revenue growth and earnings in the quarter, as revenue grew 23% year over year and adjusted earnings were $0.81. Shares increased 4% after reporting to $203, and we encourage investors to wait for a wider margin of safety.

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Company Profile

Business Description

Fortinet is a cybersecurity vendor that sells products, support, and services to small and midsize businesses, enterprises, and government entities. Its products include unified threat management appliances, firewalls, network security, and its security platform, Security Fabric. Services revenue is primarily from FortiGuard security subscriptions and FortiCare technical support. At the end of 2019, products were 37% of revenue and services were 63% of sales. The California-based company sells products worldwide, with the Americas representing 43% of sales in 2019.

Contact
899 Kifer Road
Sunnyvale, CA, 94086
T +1 408 235-7700
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2019
Stock Type Aggressive Growth
Employees 8,615

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