Shares of Fortinet plunged 6.6% in extended trading on Thursday after the company’s 2Q billings fell short of analysts’ expectations. The cybersecurity solution provider’s billings, a key sales growth metric, grew 14.3% to $711.5 million year-over-year but missed Street estimates of $712.1 million.
FTNT) 2Q billings result reflects slowing traditional firewall market growth as corporates shift to cloud computing. During the earnings conference call, the company’s CEO Ken Xie said, “the traditional firewall [is] where we do see the growth slowdown.” As a result, the company is now focusing on expanding cloud solutions to counter the weakening firewall market, he further stated.” data-reactid=”13″>Fortinet’s (FTNT) 2Q billings result reflects slowing traditional firewall market growth as corporates shift to cloud computing. During the earnings conference call, the company’s CEO Ken Xie said, “the traditional firewall [is] where we do see the growth slowdown.” As a result, the company is now focusing on expanding cloud solutions to counter the weakening firewall market, he further stated.
Brian Essex downgraded Fortinet to Hold from Buy stating that "expectations and multiples" of the stock are elevated at current levels. Essex said that "investors have become much more optimistic about FTNT’s ability to execute over the next several years.” However, he raised the stock’s price target to $140 (0.35% upside potential) from $129.” data-reactid=”14″>Last month, Goldman Sachs analyst Brian Essex downgraded Fortinet to Hold from Buy stating that “expectations and multiples” of the stock are elevated at current levels. Essex said that “investors have become much more optimistic about FTNT’s ability to execute over the next several years.” However, he raised the stock’s price target to $140 (0.35% upside potential) from $129.
Nonetheless, Fortinet reported better-than-expected 2Q results. Its adjusted EPS of $0.82 beat analysts’ expectations of $0.65 and improved from the year-ago quarter’s EPS of $0.58. Revenues rose 18% to $615.5 million year-over-year and surpassed Street estimates of $599 million.
price target of $135.93 implies a downside potential of 2.6%. (See FTNT stock analysis on TipRanks)” data-reactid=”20″>Overall, FTNT has a Moderate Buy analyst consensus. The average price target of $135.93 implies a downside potential of 2.6%. (See FTNT stock analysis on TipRanks)
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