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Cybersecurity firm Fortinet ( FTNT ) must shed its SMB-only reputation to tackle competitive challenges from rivals Check Point Software Technology ( CHKP ), Cisco Systems ( CSCO ) and Palo Alto Networks ( PANW ), a Dougherty analyst says. But the Sunnyvale, Calif., company has made headway with its previously tumbling salesforce and, late Tuesday, is expected to a deliver a “relatively solid” Q1 report, Dougherty analyst Catherine Trebnick wrote in a research report. For Q1, the consensus of 33 analysts polled by Thomson Reuters projects $273.4 million in sales and 9 cents earnings per share ex items, up a respective 28% and 12.5%. Three months ago, Fortinet guided to $270 million to $275 million and 8-9 cents. Fortinet’s billings model for $315 million to $322 million would be up 25% at the midpoint of guidance vs. the year-earlier period. Billings would drop 18% sequentially, though following a massive Q4 billings beat. Trebnick maintained her 38 price target and buy rating on Fortinet stock. Industry checks show Fortinet continues to dominate within the SMB market and is benefiting from the rip-and-replace of older firewall systems. “According to our sources, next-generation firewall refreshing amongst SMBs is occurring as many in this portion of the market have been slower to upgrade than large enterprises,” she wrote. Fortinet also appears to be winning in the small data center space, Trebnick wrote. But playing with bigger Check Point, Cisco and Palo Alto Networks will require shedding that “stigma as an SMB-only provider,” she wrote. “They have yet to make way against competitors in this space,” she wrote. Fortinet stock rose 2.1% to close at 30.27 in the stock market today , somewhat outperforming the broader cybersecurity market. Scalper1 News
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