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With a market cap of $44.5 billion, Fortinet, Inc. (FTNT) specializes in network security appliances and Unified Threat Management solutions for enterprises, service providers, and government entities worldwide. Based in Sunnyvale, California, the company integrates multiple security layers to protect against diverse IT threats while optimizing network performance.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Fortinet fits this criterion perfectly. Fortinet is renowned for pioneering integrated cybersecurity solutions and is particularly known for its flagship FortiGate firewall product line.
However, the network security company has declined 28.1% from its 52-week high of $81.24, achieved in July last year. Shares of FTNT are down 14.6% over the past three months, underperforming the broader Nasdaq Composite's ($NASX) 7.5% gain over the same time frame.
Longer term, FTNT is down marginally on a YTD basis, lagging behind the NASX's 17.3% gains. Moreover, shares of Fortinet have declined 18.5% over the past 52 weeks, compared to NASX's 30.6% gains over the same time frame.
To confirm the bearish price trend, FTNT has been trading below its 50-day moving average since April and has remained below its 200-day moving average since May.
FTNT has underperformed due to declining sales of firewall products, challenges in transitioning to cloud-based services, and increased competition in the cybersecurity sector. Moreover, the stock tumbled nearly 9.7% following its Q1 earnings results on May 2, primarily due to a decline in billings. Despite beating earnings estimates, investors were worried about the company's ability to maintain its competitive edge in a challenging cybersecurity market.
To emphasize FTNT’s underperformance, the stock’s rival CrowdStrike Holdings, Inc. (CRWD) has significantly outperformed FTNT, with a 50.7% rally on a YTD basis and a 167.8% surge over the past 52 weeks.
Despite the stock’s underwhelming price action, analysts remain cautiously optimistic about its prospects. Among the 36 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and it is currently trading below the mean price target of $70.59.
On the date of publication, Sohini Mondal 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.
