Fortinet stock retreated on mixed September quarter guidance, though second-quarter earnings, revenue and billings topped analyst estimates. The size of the Q2 beat for FTNT stock disappointed some investors.
Sunnyvale, Calif.-based Fortinet reported after the market close on Wednesday. Fortinet stock tumbled 16.3% to close at 52.61 on the stock market today.
UBS analyst Roger Boyd said in a report: "Fortinet put up another impressive quarter, but fell short of high expectations with beats of 4% on billings, 3% on product revenue, and about 0% on revenue falling short of the double-digit beats seen in prior quarters."
Fortinet earnings on an adjusted basis came in at 24 cents per share, up 26% from a year earlier. Also, revenue for FTNT stock climbed 29% to $1.03 billion.
Analysts expected Fortinet earnings of 22 cents a share on sales of $1.027 billion for the period ended June 30.
The cybersecurity firm said billings, a sales growth metric, rose 36% to $1.30 billion compared with analyst estimates of $1.25 billion.
FTNT Stock: Revenue Outlook Disappoints
For the current quarter ending in September, the company forecasts earnings of 27 cents at the midpoint of guidance. Fortinet said it expects revenue of $1.12 billion. Analysts had projected earnings of 27 cents a share on revenue of $1.13 billion.
"Billings and product revenue each grew in the mid-30s on a year-over-year basis and significantly beat Street estimates," said Mizuho Securities analyst Gregg Moskowitz in a report. "That said, services revenue was surprisingly below consensus due to supply chain and other temporary factors. Guidance was also more mixed than expected, with 2022 billings raised but total revenue only maintained."
At an investor day for FTNT stock on May 10, Fortinet unveiled 2025 financial targets that call for billings of $10 billion and revenue of $8 billion, implying a three-year average growth rate of 22% for both metrics.
Also, Fortinet stock holds a Relative Strength Rating of 83 out of a best-possible 99, according to IBD Stock Checkup.
The company competes in the firewall network security market against Palo Alto Networks, Check Point Software Technologies and others. Firewalls block online intrusions and monitor web-based apps.
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