BofA’s Hartnett says concentrated U.S. stock returns are likely to persist
On Friday, Stifel analysts, led by Adam C. Borg, increased their price target on Fortinet stock (NASDAQ:FTNT) to $115, up from the previous $103, while maintaining a Hold rating. The revision reflects Fortinet’s potential in the forthcoming firewall refresh cycle. Currently trading at $104.72, near its 52-week high of $105.82, the company is poised to leverage its cross-selling opportunities with SASE/SecOps during the refresh period in the upcoming quarters. According to InvestingPro analysis, the stock appears to be fairly valued based on its proprietary Fair Value model.
Despite mixed feedback from Stifel’s checks regarding Fortinet’s cross-selling strategy, the company’s management remains optimistic. With impressive gross profit margins of 79.71% and revenue growth of 10.4% over the last twelve months, Fortinet has demonstrated strong operational efficiency. In terms of financial guidance, Fortinet’s expected billings for the fiscal year 2025 align with consensus estimates, while projected revenue surpasses expectations. This alignment suggests a steady outlook for the company’s financial performance.
Stifel’s commentary highlights Fortinet’s strong positioning to continue generating double-digit top-line growth and robust free cash flow (FCF) in the future. The analysts are closely monitoring the company for any signs of further improvements in its firewall offerings, as well as the success of attaching SASE/SecOps solutions to its products in the upcoming refresh cycle. InvestingPro data reveals a "GREAT" financial health score of 3.32, supporting the positive outlook. Subscribers can access 16 additional ProTips and a comprehensive Pro Research Report for deeper insights into Fortinet’s valuation and growth prospects.
The endorsement of Fortinet’s strategic direction by Stifel underscores the company’s solid fundamentals and its ability to capitalize on market opportunities. With a market capitalization of $80.26 billion and a P/E ratio of 52.38, Fortinet commands a premium valuation that reflects high growth expectations. As Fortinet approaches its refresh cycle, the market will be watching to see if the company can indeed enhance its product offerings and achieve the growth and financial targets set forth by its management and anticipated by analysts.
In other recent news, Fortinet, a cybersecurity firm, has been the focus of several financial firms’ attention, with Cantor Fitzgerald, Baird, Rosenblatt Securities, and TD Cowen all adjusting their price targets. Cantor Fitzgerald increased its price target for Fortinet from $110 to $115, maintaining a neutral stance. This adjustment came in response to Fortinet’s total billings growth of 7.3% year-over-year and a significant uptick in larger deals, particularly in the Small and Medium Business (SMB) segment.
Baird downgraded Fortinet from Outperform to Neutral, but increased the price target to $112. Despite a downturn in January, Baird expects Fortinet’s revenue growth to reaccelerate to a low-teens percentage year-over-year. Rosenblatt Securities also raised its price target for Fortinet to $115, maintaining a "Buy" rating, due to robust fourth-quarter 2024 earnings and a positive outlook for the company’s CY25 budgets.
TD Cowen analysts increased the price target for Fortinet shares from $105.00 to $120.00, maintaining a Buy rating. The firm cited strong demand trends for the company’s network security and cloud-related solutions as the basis for the adjustment. These recent developments highlight the financial world’s attention towards Fortinet’s performance and potential growth.
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