Is Today's Selloff In Fortinet A Buying Opportunity?
Alpha Gen Capital
Alpha Gen Capital
Fortinet Is Performing Well In The Cyber Security Industry
Can Fortinet Deliver A One-Two Punch Of Growth With Higher Margins?
Stephen Simpson, CFA
Stephen Simpson, CFA
Tue, Jun. 7, 12:03 PM
- Fortinet (FTNT) is buying AccelOps, a provider of integrated network security, performance, and availability monitoring software and security analytics tools, for an undisclosed sum.
- AccelOps claims it provides the first solution to simultaneously address both security operations centers (SOCs) and network operations centers (NOCs), and to correlate security and network data into a common view. The company provides both on-premise and cloud-based versions of its software.
- Fortinet argues the purchase will give customers "greater visibility across both Fortinet and multi-vendor security solutions." The purchase strengthens Fortinet's recently-unveiled Security Fabric strategy, through which the company is looking to feed threat intelligence from both Fortinet and non-Fortinet hardware and software into a common security policy engine.
- Security correlation data and analytics produced by AccelOps' software will feed into Fortinet's Security Fabric. In addition, AccelOps will help power a new subscription service that will "provide customers with automated security and performance audits of their specific security infrastructure."
Thu, May 26, 5:46 PM
- Several security tech names are selling off after next-gen firewall leader and cybersecurity poster child Palo Alto Networks (PANW - down 9.4%) offered in-line guidance (below consensus at the midpoints) to go with an FQ3 sales beat and in-line EPS, disappointing investors accustomed to seeing Palo Alto provide above-consensus sales guidance with its results.
- Palo Alto's billings rose a solid 61% Y/Y in FQ3, nearly on par with FQ2's 62% growth and outpacing revenue growth of 48%. Product revenue rose 33%, and services revenue (boosted by subscription offerings such as WildFire) 63%. EPS was pressured by a 50% Y/Y increase in GAAP operating expenses to $309.5M.
- FireEye (NASDAQ:FEYE) is down 2% after hours. CyberArk (NASDAQ:CYBR) is down 2.4%. Imperva (NYSE:IMPV) is down 1.7%. Fortinet (NASDAQ:FTNT) is down 1.5%.
- ETF: HACK
Wed, Apr. 27, 9:11 AM
Tue, Apr. 26, 5:40 PM
Tue, Apr. 26, 4:44 PM
- Fortinet (NASDAQ:FTNT) has soared 8.9% in late trading following a Q1 earnings report featuring solid beats and strong billings.
- The company swung to a GAAP loss, though income grew nearly 50% Y/Y on a non-GAAP basis. Non-GAAP operating income was $30.1M (operating margin 11%).
- Revenues were up nearly 34% overall with service revenues a bright spot. Total billings grew 30% to $330.5M, and deferred revenue of $837.2M was up from last quarter's $791.3M.
- Revenue breakout: Product, $124.6M (up 28%); Service, $160M (up 39%).
- Gross profit on product was $75.2M (up 34%); on service, $131.6M (up 41.3%).
- Conference call link
- Press Release
Tue, Apr. 26, 4:16 PM
Mon, Apr. 25, 5:35 PM
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Tue, Mar. 22, 5:20 PM
- Fortinet (NASDAQ:FTNT) has confirmed to enterprise tech site CRN chief marketing officer Holly Rollo and Americas enterprise sales SVP Pete Brant have left the company.
- A spokesperson says the departures are unrelated, while adding Rollo left to "pursue an opportunity that is more closely aligned with her professional interests and goals as well as a personal desire to be located closer to her family." Brant's LinkedIn profile indicates he's now in charge of North American sales at application delivery controller/security hardware vendor F5.
- Sources tells CRN Fortinet has also seen many HR employees depart. Brant's departure follows a major salesforce reorg in which Fortinet's U.S. Enterprises sales team was disbanded and merged into two other groups.
- Shares closed down 2.4% today thanks to a late-session selloff that followed the CRN report. Fortinet's Americas revenue grew 33% Y/Y in Q4 to $122M, and accounted for 41% of total revenue.
Fri, Feb. 5, 11:01 AM
- A long list of enterprise software and security tech names are off sharply after business intelligence/analytics software upstart Tableau (down 45.3%) reported slower-than-expected license revenue growth and issued below-consensus Q1/2016 guidance.
- Also possibly weighing: LinkedIn (down 39.6%), which derives a large % of its revenue from cloud-based recruiting and sales tools for enterprises, issued weak Q1/2016 guidance.
- Given the magnitude of the drops, margin calls and forced selling by funds could be playing a big role. The Nasdaq is down 2.2%.
- Tableau suggested its growth slowdown has to do with softening IT spend and a need to improve sales productivity, but analysts have raised questions about competition from the likes of Microsoft, Amazon, and Qlik. LinkedIn forecast a growth slowdown for its field sales hiring solutions business, while blaming European/Asian macro pressures. The company also noted its display ad business continues declining amid weak industry growth.
- Major enterprise software decliners include Splunk (SPLK -23.7%), Workday (WDAY -15.1%), Adobe (ADBE -7%), Zendesk (ZEN -15.2%), ServiceNow (NOW -13.6%), NetSuite (N -12.4%), Salesforce (CRM -11.2%), Paycom (PAYC -10.6%), Ellie Mae (ELLI -11.5%), Cornerstone OnDemand (CSOD -7.8%), Veeva (VEEV -7.7%), Ultimate Software (ULTI -9%), Luxoft (LXFT -7.5%), Manhattan Associates (MANH -8.5%), Box (BOX -6.6%), Guidewire (GWRE -13.6%), Demandware (DWRE -9.3%), Hortonworks (HDP -9.7%), and Tableau rival Qlik (QLIK -16.6%). The casualty list includes many cloud software firms, as well as several analytics software plays. Previously covered: New Relic, Atlassian.
- Major decliners among security tech firms: Palo Alto Networks (PANW -12%), FireEye (FEYE -8.9%), Rapid7 (RPD -8.6%), CyberArk (CYBR -8.3%), Proofpoint (PFPT -8%), Imperva (IMPV -8.3%), Fortinet (FTNT -6.9%), and Vasco (VDSI -5.1%). The selloff comes in spite of an FQ3 beat and in-line FQ4 guidance from Symantec, which has been losing share to various upstarts.
Thu, Jan. 28, 5:38 PM
Thu, Jan. 28, 5:06 PM
- With expectations low going into earnings, Fortinet (NASDAQ:FTNT) has surged to $29.00 after hours after posting nearly in-line Q4 results and providing healthy 2016 guidance in its earnings slides (.pdf) - revenue of $1.25B-$1.26B (+24% Y/Y) and EPS of $0.67-$0.69 vs. a consensus of $1.24B and $0.68.
- Q1 guidance is light: Revenue of $270M-$275M and EPS of $0.08-$0.09 vs. a consensus of $277.6M and $0.13.
- Fortinet has also announced a new $200M buyback - it's good for repurchasing 4% of shares at current levels. The buyback replaces a prior authorization through which $137.5M was spent to buy back 5.5M shares. $60M was spent on buybacks in Q4.
- Billings: Q4 billings totaled $380.9M, up 35% Y/Y, above revenue of $296.5M, and topping guidance of $364M-$369M. Q1 billings guidance is at $315M-$322M (+25% Y/Y), and full-year guidance at $1.505B-$1.52B (+23%). Fortinet has a history of issuing conservative billings guidance. Billings growth led the deferred revenue balance to rise 42% Y/Y in Q4 to $791.3M.
- Fortinet's Q4 results, earnings release
Thu, Jan. 28, 4:16 PM
- Fortinet (NASDAQ:FTNT): Q4 EPS of $0.18 in-line.
- Revenue of $296.52M (+32.4% Y/Y) beats by $0.3M.
Wed, Jan. 27, 5:35 PM| Wed, Jan. 27, 5:35 PM | 9 Comments
Tue, Jan. 26, 8:38 AM
- Stating Q4 channel checks point to a slowdown in momentum, Deutsche's Imtiaz Koujalgi has downgraded Fortinet (NASDAQ:FTNT) to Hold ahead of the unified threat management/next-gen firewall appliance vendor's Thursday afternoon Q4 report. His target has been cut by $15 to $34.
- FTNT -2.1% premarket to $26.65. Piper downgraded Fortinet last week, while citing a soft Q4 reseller survey, a shift in IT spending priorities, growing price pressure, and tough comps.
- Shares now go for just 3.9x the midpoint of a 2015 billings guidance range of $1.215B-$1.22B.
Wed, Jan. 20, 9:13 AM
Wed, Jan. 20, 8:40 AM
- Piper's Andrew Nowinski has downgraded Fortinet (NASDAQ:FTNT) to Neutral ahead of its Jan. 28 Q4 report, and cut his target by $20 to $30.
- Nowinski: "Our downgrade is based on a number of factors, including waning demand trends highlighted in our 4Q15 reseller survey, a shift in spending priorities noted in our 2016 CIO survey, increasing pricing pressure and difficult comparisons. Despite trading at a modest discount to peers, we believe Fortinet could struggle to exceed expectations for the aforementioned reasons and therefore we believe the current valuation appropriately balances the risk/reward."
- Shares have dropped to $24.56 premarket on a morning Nasdaq futures are down 1.9%. They also fell hard yesterday.
Fortinet, Inc. provides threat management and network security solutions that are designed to address the fundamental problems of an increasingly bandwidth-intensive network environment and a more sophisticated information technology threat landscape. Its products and subscription services... More
Industry: Computer Peripherals
Country: United States
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