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Fortinet Inc FTNT

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Morningstar’s Analysis

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Check Point Software, Fortinet, and Palo Alto Networks Moat Ratings Upgraded to Wide

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

We are upgrading our moat ratings for Check Point Software Technologies, Fortinet, and Palo Alto Networks to wide from narrow. For moat trends, we maintained Palo Alto as positive, adjusted Fortinet to positive from stable, and kept Check Point as stable. The wide moat upgrades also drove fair value estimate increases: Check Point's fair value estimate is now $137 from $132, Fortinet's fair value estimate is upped to $285 from $250, and Palo Alto's fair value estimate has increased to $585 from $550. We view shares in steady but lower-growing Check Point as attractive for patient investors. Palo Alto's shares are a bit undervalued, in our view, and we believe the firm will continue to be a leader and share gainer. We think investors should wait for a pullback in Fortinet's shares.

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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.

899 Kifer Road
Sunnyvale, CA, 94086
T +1 408 235-7700
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2019
Stock Type Aggressive Growth
Employees 9,700