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On Thursday, Piper Sandler reiterated their Overweight rating on Fortinet (NASDAQ:FTNT) stock, with a steady price target of $135.00, representing a potential 26% upside from the current price of $106.72. The firm’s analysis highlighted several positive aspects of the company’s recent performance despite some investors’ concerns over the lack of significant overperformance in revenue and billings for the quarter. According to InvestingPro data, Fortinet maintains a "GREAT" financial health score, with 15+ additional exclusive insights available to subscribers.
Fortinet’s billing growth saw a six-point increase, with notable outperformance in its FortiGate product and strong enterprise demand. These factors, according to Piper Sandler, indicate a positive direction for the company and support the thesis of an ongoing refresh cycle. The company’s impressive 80.56% gross profit margin and 12.27% revenue growth over the last twelve months further validate this positive trajectory.
The company’s guidance for the future was described as prudent, suggesting the potential for sustainable outperformance in the coming periods. The first quarter results revealed a broad-based acceleration in billings across different product segments, with enterprise demand being a particular highlight. The FortiGate product’s strong performance in the first quarter also provided confidence in the expected second-half acceleration in refresh demand.
In summary, Piper Sandler believes that the key factors supporting their Overweight rating on Fortinet remain intact after reviewing the first quarter results. The firm’s stance suggests confidence in Fortinet’s strategic direction and potential for future growth.
In other recent news, Fortinet reported its first-quarter earnings for 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.58, compared to the forecast of $0.53. The company’s revenue met expectations, reaching $1.54 billion, a 14% increase year-over-year. Despite these positive results, Fortinet’s stock experienced a significant drop in aftermarket trading. Evercore ISI maintained its In Line rating for Fortinet shares with a $105 price target, noting mixed first-quarter earnings, with a dip in services revenue but stronger product sales. Jefferies revised Fortinet’s stock price target to $100 from $105, while keeping a Hold rating, citing modestly better-than-expected billings and product revenue growth. Fortinet’s management expressed confidence in a stronger second half of the year, driven by hardware upgrades and demand for next-generation products. The company also maintained its billing guidance for 2025, despite exceeding first-quarter expectations, due to persistent customer uncertainty. Additionally, Fortinet announced new AI capabilities and product launches, highlighting its strong financial health with a record operating margin and free cash flow.
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