Nomura Securities Reiterates a 'Buy' on Fortinet (FTNT); Robust Billings Growth in Tough Macro Environment

July 27, 2012 1:34 PM EDT Send to a Friend
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Price: $25.17 --0%

Rating Summary:
    22 Buy, 10 Hold, 0 Sell

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    Up: 7 | Down: 10 | New: 13
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Nomura Securities reiterates a 'Buy' on Fortinet (NASDAQ: FTNT) price target of $32.00.

Analyst, Rick Sherlund, said, "Fortinet reported 2Q’12 billings and revenues ahead of Street estimates. Second-quarter billings growth accelerated to 32%, the fourth consecutive quarter of accelerating billings growth and 6% ahead of Street estimates of 25% growth. Revenues grew 25% vs Street estimates of 22%. EPS of $0.12 was in line with consensus, with revenue upside absorbed by higher COGS. Given the negative sentiment around software stocks (particularly those with greater than 30% exposure to EMEA), these results should be viewed positively by the Street. That said, we note that growth in billings (the key metric for the stock) should slow in the coming quarter due to a more difficult compare. Despite 2Q’12 billings growth accelerating for the fourth quarter in a row, we are more cautious on 3Q’12 growth given the difficult compare facing Fortinet...We continue to be positive on the fundamentals for the company including an attractive growth market, good execution, broad product line and high performance solutions that span all vertical markets and all geographies. The shares are trading at 16.4x 2013E EV/uFCF. On a P/E ex cash basis, the stock trades at 30x 2013E and on a revenue basis the stock trades at a 2013E EV/revenues of 4.9x."

For an analyst ratings summary and ratings history on Fortinet click here. For more ratings news on Fortinet click here.

Shares of Fortinet closed at $25.05 yesterday.


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