With an impressive market cap of $45.6 billion, Fortinet Incorporated (FTNT) leads the charge in cutting-edge networking and security solutions. From robust firewalls to seamless wireless LAN, their innovations protect businesses worldwide. Headquartered in Sunnyvale, California, Fortinet serves enterprises and small businesses, delivering unparalleled support and training.
Shares of Fortinet have underperformed the broader market considerably over the past year. FTNT has declined 11.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.7%. In 2024, Fortinet stock rose 2.7%, while the SPX is up 9.5% on a YTD basis.
Narrowing the focus, FTNT’s underperformance looks more pronounced in comparison to the Ishares Cybersecurity And Tech ETF (IHAK). The exchange-traded fund has gained 31.7% over the past year, significantly outperforming FTNT.
Despite Fortinet's revenue growth and increased adjusted EPS, FTNT shares plunged post-Q1 earnings on May 2, as investors were disappointed with total billings of $1.41 billion, falling short of the consensus estimate of $1.70 billion.
For the current fiscal year, ending in December, Street expects FTNT’s EPS to fall marginally year over year to $1.46. However, the company’s earnings surprise history is solid. It surpassed the consensus estimate in each of the last four quarters.
Among the 36 analysts covering FTNT stock, the consensus rating is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, two “Moderate Buys,” and 23 “Holds.”
The consensus rating has been consistent over the past months.
Analysts at multiple brokerage firms trimmed their price targets on FTNT after earnings, including Piper Sandler, which maintained a “Neutral” rating on the stock and lowered the price target to $70 from $75, citing a modest shortfall in billings and a lower billings forecast for the second quarter despite strong revenue and margins in the first quarter.
The mean price target of $70.50 suggests an 18% premium to FTNT from current levels. The Street-high target of $87 represents an upside potential of 45.7%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
