Fortinet (FTNT) Upgraded to Buy at Zacks Investment Research

Fortinet (NASDAQ:FTNT) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research note issued on Tuesday. The firm presently has a $52.00 price target on the software maker’s stock. Zacks Investment Research‘s price objective would suggest a potential upside of 11.88% from the stock’s current price.

According to Zacks, “Fortinet reported better-than-expected fourth-quarter 2017 results. The year over year comparisons were also favorable on both the counts. Notably, Fortinet has outperformed the industry in the last one year. Going ahead, we believe that the company’s strategy of focusing on selling subscription-based services will enable it to generate more stable revenues and help in expanding margins. Furthermore, acquisitions are a major positive for Fortinet as these help it to strengthen its product portfolio and capabilities, thereby boosting its top-line performance. Nonetheless, we are slightly concerned over the company’s declining revenue growth rate. Notably, over the last six quarters, the company’s revenue growth rates have been around 20%, which are significantly lower than its previous rates of over 30%. Also, a tepid first quarter revenue outlook makes us slightly cautious about its near-term performance.”

Other equities analysts have also recently issued reports about the company. Dougherty & Co cut Fortinet from a “buy” rating to a “neutral” rating in a research note on Thursday, February 1st. Credit Suisse Group raised their price objective on Fortinet from $33.00 to $37.00 and gave the stock an “underperform” rating in a research note on Tuesday, February 6th. Morgan Stanley raised their price objective on Fortinet from $51.00 to $53.00 and gave the stock an “overweight” rating in a research note on Tuesday, February 6th. Bank of America raised their price objective on Fortinet from $48.00 to $49.00 and gave the stock a “buy” rating in a research note on Tuesday, February 6th. Finally, JMP Securities raised their price objective on Fortinet from $41.00 to $54.00 and gave the stock a “market outperform” rating in a research note on Friday, January 26th. One research analyst has rated the stock with a sell rating, eleven have assigned a hold rating, fourteen have given a buy rating and two have issued a strong buy rating to the company. The company currently has a consensus rating of “Buy” and an average target price of $47.67.

Shares of Fortinet (FTNT) traded down $0.06 during trading hours on Tuesday, reaching $46.48. 2,681,000 shares of the company’s stock traded hands, compared to its average volume of 1,936,473. Fortinet has a one year low of $35.44 and a one year high of $47.85. The firm has a market capitalization of $8,093.31, a P/E ratio of 273.41, a price-to-earnings-growth ratio of 3.77 and a beta of 0.86.

Fortinet (NASDAQ:FTNT) last issued its quarterly earnings data on Monday, February 5th. The software maker reported $0.32 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.29 by $0.03. Fortinet had a net margin of 2.10% and a return on equity of 11.77%. The company had revenue of $416.70 million during the quarter, compared to the consensus estimate of $409.04 million. During the same quarter last year, the company earned $0.30 earnings per share. Fortinet’s revenue for the quarter was up 14.9% on a year-over-year basis. equities analysts predict that Fortinet will post 0.74 EPS for the current fiscal year.

Fortinet declared that its Board of Directors has approved a share repurchase plan on Thursday, October 26th that allows the company to buyback $400.00 million in outstanding shares. This buyback authorization allows the software maker to purchase shares of its stock through open market purchases. Shares buyback plans are usually a sign that the company’s board believes its shares are undervalued.

In other news, CEO Ken Xie sold 89,423 shares of the firm’s stock in a transaction on Thursday, February 8th. The stock was sold at an average price of $45.08, for a total transaction of $4,031,188.84. Following the transaction, the chief executive officer now directly owns 12,608,811 shares of the company’s stock, valued at $568,405,199.88. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, VP Michael Xie sold 40,000 shares of the firm’s stock in a transaction on Friday, December 1st. The shares were sold at an average price of $41.95, for a total value of $1,678,000.00. Following the transaction, the vice president now directly owns 6,692,200 shares in the company, valued at $280,737,790. The disclosure for this sale can be found here. Insiders have sold 209,592 shares of company stock worth $9,382,359 over the last three months. Corporate insiders own 17.00% of the company’s stock.

Institutional investors and hedge funds have recently modified their holdings of the company. State Street Corp grew its holdings in Fortinet by 3.0% during the second quarter. State Street Corp now owns 4,581,467 shares of the software maker’s stock worth $171,534,000 after acquiring an additional 132,054 shares during the period. Ameriprise Financial Inc. grew its holdings in Fortinet by 7.0% during the third quarter. Ameriprise Financial Inc. now owns 4,400,011 shares of the software maker’s stock worth $157,693,000 after acquiring an additional 288,097 shares during the period. Bank of New York Mellon Corp grew its holdings in Fortinet by 8.6% during the third quarter. Bank of New York Mellon Corp now owns 3,752,012 shares of the software maker’s stock worth $134,472,000 after acquiring an additional 296,648 shares during the period. Pictet Asset Management Ltd. grew its holdings in Fortinet by 20.8% during the third quarter. Pictet Asset Management Ltd. now owns 1,795,700 shares of the software maker’s stock worth $64,358,000 after acquiring an additional 309,000 shares during the period. Finally, Global Thematic Partners LLC grew its holdings in Fortinet by 16.9% during the fourth quarter. Global Thematic Partners LLC now owns 1,379,731 shares of the software maker’s stock worth $60,280,000 after acquiring an additional 199,227 shares during the period. 70.68% of the stock is currently owned by institutional investors.

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About Fortinet

Fortinet, Inc is a network security company. The Company provides cyber security solutions to a range of enterprises, service providers and government organizations across the world. Its network security solution consists of FortiGate physical, virtual machine and cloud platforms, which provide integrated security and networking functions to protect data, applications and users from network-and content-level security threats.

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