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Thursday’s trading session saw Fortinet stock decline following the company’s first-quarter earnings report. Despite a solid start to the year and a "GREAT" financial health rating according to InvestingPro, Fortinet’s reaffirmation of its full-year 2025 revenue guidance, which factors in a cautious outlook due to macroeconomic concerns, seemed to unsettle investors, with shares dropping approximately 12.5% after hours. The cybersecurity giant, currently valued at $81.61 billion, is trading near its Fair Value.
Truist Securities analyst Junaid Siddiqui maintained a Buy rating on Fortinet (NASDAQ:FTNT) with a price target of $125.00. Siddiqui’s remarks highlighted the company’s solid performance in the first quarter of 2025, supported by impressive gross profit margins of 80.56% and overall revenue growth of 12.27%. While services revenue saw a quarter-over-quarter decline, services billings increased by 14% year-over-year. Additionally, product revenue grew by 12% compared to the previous year, indicating that enterprises are in the initial stages of hardware upgrades.
The analyst pointed out that billing strength was particularly notable in the areas of Secure Access Service Edge (SASE) and Security Operations (SecOps), which grew by 18% and 29% year-over-year, respectively. Siddiqui emphasized Fortinet’s balanced approach to growth and profitability, considering it a defensible investment for the long term.
In light of the recent earnings report and market response, Truist Securities has adjusted its estimates but remains firm on the $125 price target and the Buy rating for Fortinet stock. The company’s strategic focus on key growth areas like SASE and SecOps appears to be a driving factor behind Truist’s continued confidence in Fortinet’s market position and financial outlook.
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. Revenue grew 14% year-over-year to reach $1.54 billion, meeting market predictions. Despite these strong financial results, Fortinet’s stock experienced a notable decline in aftermarket trading. Piper Sandler maintained an Overweight rating on Fortinet, citing a positive direction for the company, with strong enterprise demand and a successful FortiGate product. Conversely, Jefferies adjusted its price target for Fortinet to $100 from $105, retaining a Hold rating due to service revenue growth not meeting expectations. Meanwhile, Bernstein lowered its price target to $94, maintaining a Market Perform rating, expressing concerns about Fortinet’s positioning in the event of economic contractions. Evercore ISI kept its In Line rating with a $105 price target, noting a mixed earnings report but confidence in a stronger second half driven by hardware upgrades. These developments reflect a varied outlook among analysts regarding Fortinet’s future performance.
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