William Blair analyst Jonathan Ho has maintained their neutral stance on FTNT stock, giving a Hold rating today.
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Jonathan Ho has given his Hold rating due to a combination of factors that reflect both positive and concerning aspects of Fortinet’s current market position. Despite Fortinet’s solid second-quarter performance, which exceeded expectations in terms of billings and revenue, there is confusion surrounding the company’s firewall refresh cycle. The company announced that 40% to 50% of its accelerated firewall refresh opportunity has been completed, yet this has not translated into the anticipated product revenue growth.
The challenge lies in Fortinet’s difficulty with visibility and measurement of the refresh cycle’s progress, leading to mismatched expectations among investors. This uncertainty has resulted in the stock trading lower, as concerns about the potential for reacceleration and risks to future estimates persist. While management remains confident in the medium-term outlook, emphasizing growth from newer product categories like SASE, investors are seeking more transparency and clarity on the refresh cycle’s pace and its implications for future performance.
Ho covers the Technology sector, focusing on stocks such as Fastly, Tyler Technologies, and Cloudflare. According to TipRanks, Ho has an average return of 8.9% and a 52.50% success rate on recommended stocks.
In another report released today, Barclays also maintained a Hold rating on the stock with a $90.00 price target.