Fortinet (FTNT): Shortfall Macro, Not Company Specific - Oppenheimer
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Oppenheimer analyst, Shaul Eyal, reiterated his Outperform rating on shares of Fortinet (NASDAQ: FTNT) despite the company pre-announcing disappointing 3Q16 results ($313.5M at the midpoint vs. consensus $322M). FTNT was impacted by macroeconomic issues in Latin America and the UK, and execution challenges relating primarily to the ongoing sales force realignment in North America (43% of revenue). The final two weeks of the quarter accounted for a large portion of the shortfall due to the lengthening of big-ticket purchases—particularly within North American enterprises and Telecoms.
The analyst stated "we believe the shortfall is more company specific though the "macro" point could be reflective of an ongoing shift to a subscription model rather than a product driven one. Given a rapidly consolidating security market environment, Elliott's small passive stake (~1.6%) could potentially become more relevant".
No change to the PT of $40.
Shares of Fortinet closed at $34.09 yesterday.
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