BofA’s Hartnett says concentrated U.S. stock returns are likely to persist
On Friday, Cantor Fitzgerald adjusted its price target for Fortinet shares (NASDAQ:FTNT) to $115.00, an increase from the previous target of $110.00. The firm maintained a Neutral stance on the cybersecurity company’s stock, which is currently trading near its 52-week high of $105.82. The revision followed Fortinet’s reported total billings growth of 7.3% year-over-year, surpassing the consensus estimate of 5.1%. According to InvestingPro analysis, the stock appears slightly overvalued relative to its Fair Value.
The company’s current Remaining Performance Obligations (RPO) bookings, adjusted for backlog, showed an acceleration to 8%. Fortinet also experienced a significant uptick in larger deals, with transactions between $5 million and $10 million increasing by 90%. The Small and Medium Business (SMB) segment was particularly robust, leading growth at 30%. This growth contributes to Fortinet’s impressive revenue performance, which has increased by 10.4% over the last twelve months.
Fortinet’s fourth-quarter operating margin for the fiscal year 2024 reached 39.2%, which was notably higher than Cantor Fitzgerald’s estimate of 33.4% and the consensus of 33.7%. This represents a year-over-year increase of 720 basis points.
The firm highlighted Fortinet’s advancements in Secure Access Service Edge (SASE) and Security Operations (SecOps) adoption, which have contributed to strong Annual Recurring Revenue (ARR) growth. This performance indicates Fortinet’s continued progress and potential in these expanding market segments.
In other recent news, major analyst firms have updated their stances on Fortinet, a cybersecurity company. Cantor Fitzgerald has raised the price target for Fortinet to $110, citing positive checks for the fourth quarter of 2024 and a favorable demand outlook for 2025. Baird, on the other hand, downgraded Fortinet from Outperform to Neutral, while increasing the price target to $112, reflecting a cautious approach despite the company’s strong performance. Rosenblatt Securities raised the price target for Fortinet to $115, maintaining a "Buy" rating, and TD Cowen increased the price target to $120, also holding a Buy rating, due to robust demand trends for the company’s network security and cloud-related solutions. However, Raymond (NSE:RYMD) James downgraded Fortinet from Outperform to Market Perform, questioning the company’s momentum amidst a potential ’supercycle’ in network security. These are recent developments that reflect varying perspectives on Fortinet’s performance and future prospects.
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