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Fortinet (NASDAQ:FTNT), a provider of network security appliances to enterprises and service providers, expects to float its IPO this week. Jim Cramer thinks that the IPO is priced “much lower than what I think this stock is worth based on the fundamentals".

Business Overview (from prospectus)

We have pioneered an innovative, high performance network security solution to the fundamental problems of an increasingly bandwidth-intensive network environment and a more sophisticated IT threat landscape. We are a leading provider of network security appliances and the market leader in Unified Threat Management, or UTM. Through our products and subscription services, we provide broad, integrated and high performance protection against dynamic security threats while simplifying the IT security infrastructure for enterprises, service providers and government entities worldwide.

Offering: 12.5 million shares at $9 - $11 per share. Net proceeds of approximately $52.4 million will be used for working capital and other general corporate purposes.

Lead Underwriters: Morgan Stanley (NYSE:MS), J.P. Morgan (NYSE:JPM), Deutsche Bank (NYSE:DB)

Financial Highlights:

Total revenue increased $28.7 million, or 18.8%, in the first nine months of fiscal 2009 compared to the same period in fiscal 2008, primarily due to growth in services revenue... Total gross margin increased 4.2 percentage points primarily due to higher mix of services revenue versus product revenue in the first nine months of fiscal 2009 compared to the same period in fiscal 2008... Research and development expense increased $3.0 million, or 10.7%, in the first nine months of fiscal 2009 from the same period in fiscal 2008...

Competition:

Our competitors include networking companies such as Cisco Systems, Inc. (NASDAQ:CSCO), and Juniper Networks, Inc. (NYSE:JNPR), security vendors such as Check Point Software Technologies Ltd. (NASDAQ:CHKP), McAfee, Inc. (MFE), and SonicWALL, Inc. (SNWL), and other point solution security vendors.

Additional Resources:

Source: Fortinet: Will Investors Feel Secure About IPO?