Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Investors Business Daily
Investors Business Daily
Technology
REINHARDT KRAUSE

Cybersecurity Firm Fortinet Surges On Q2 Earnings, Revenue Beat

Fortinet stock soared on Wednesday after the cybersecurity provider reported second-quarter earnings and revenue  above Wall Street analyst estimates. Operating margin growth was a bright spot for Fortinet stock.

Also, Fortinet earnings came in after the market close on Tuesday. On the stock market today, Fortinet stock surged 25.3% to close at 69.93.

At Jefferies, analyst Joseph Gallo said in a report: "Q2 billings of flat year-over-year growth was better than feared while 35% operating margin was vastly better than expected. Fortinet maintained 2024 billings guide but deferred (firewall) product refresh expectations to 2025. Shares should see a higher floor given better margins which appear sustainable."

Fortinet earnings in the June quarter rose 50% to 57 cents on an adjusted basis. Revenue climbed 11% to $1.43 billion.

Meanwhile, analysts expected Fortinet earnings of 41 cents a share on sales of $1.4 billion.

Additionally, the Sunnyvale, Calif.-based firm said billings, a sales growth metric, was flat at $1.54 billion, the same as a year earlier, compared with analyst estimates of $1.52 billion.

Fortinet Stock: Q3 Guidance

For the current quarter ending Sept. 30, Fortinet forecast revenue in a range of $1.445 billion to $1.505 billion. Analysts had projected  revenue of $1.47 billion. Fortinet sad it expects billings in a range of $1.53 billion to $1.6 billion versus estimates of  $1.59 billion.

Heading into the Fortinet earnings report, the cybersecurity stock was up 4% in 2024 after also underperforming last year.

UBS analyst Roger Boyd in a report said a Fortinet rebound may be in the cards.

"If Fortinet can execute on product evolution in SASE, integration of Lacework/Next DLP (acquisitions), and its push to reinvest in sales and marketing it could make for an interesting 2025 setup, particularly with a planned November analyst day," he said. "But we admit that there are a lot of moving parts."

FTNT Stock: Firewall Growth Slows

The company competes in the firewall network security market versus Palo Alto Networks, Check Point Software Technologies and others. Firewalls block online intrusions and monitor web-based apps.

Growth has slowed in the firewall market as companies buy less computer network gear for on-premises data centers. Companies are shifting business apps and workloads to distributed cloud platforms.

Fortinet and many other cybersecurity firms are focused on a new growth market: Secure Access Service Edge. SASE offers a fast and cost-effective way of securing an organization's branch offices and remote workers.

FTNT stock holds a Relative Strength Rating of 33 out of a best-possible 99, according to IBD Stock Checkup.

The Computer Software-Security group ranks No. 177 out of 197 industry groups that IBD tracks, down from No. 75 six weeks earlier.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.