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- Still Good Time For Casting Stones Away: Fortinet
Still Good Time For Casting Stones Away: Fortinet
Another California-based cybersecurity developer of firewalls, endpoint protection solutions, intrusion detection systems etc surged into the double digits this week, trying to hold its fresh 6-month peak around $73-74 per share. Yet, it supposedly has more space for extending gains beyond an all-time high of July 2023 at $81.25, if the Wall Street crowd may dare to follow other rally examples in its peer favourites like Palo Alto Networks (PANW) and Zscaler (ZS). The share price of a more popular Palo Alto soared by 33% since the end of November. Price gains are approaching 40% in case of Fortinet, yet it has not jumped beyond its previous value records, in contrast to most companies of the segment.
Meanwhile, Fortinet group announced better-than-anticipated Q4 profit citing a glut of hacking incidents which pushed an increasing number of customers to spend more in order to safeguard their digital operations. Total billings reached $1.9 billion, 8.5% up YoY. An improvement in sales execution led to a 10% growth in revenue to $1.42 billion. The trend may continue with an outlook for 2024, when billings are estimated by CEOs to range from $6.4 to $6.6 billion and earnings per share (EPS) could between $1.65 and $1.70, compared to $1.64 in 2023. They forecasted the market to grow further from $150 billion in 2024 to $208 billion by 2027.
Shares of Fortinet jumped by nearly 9.5% in early pre-market trading on February 7, as an immediate response to the news. In a couple of hours the gains squeeze to 4.5% with local dips around $70 per share. The retreat followed a downgrade adjustment by HSBC holding from Hold to Reduce status, even while it also increased its cautious price target to $57 from the previous $49, both well below current levels. However, the stock's buyers may feel this price retreat as just another chance to pick it up from better levels.
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