UPDATE: Oppenheimer Upgrades Fortinet (FTNT) to Outperform, Calls an Acquisition Target

November 28, 2012 7:49 AM EST Send to a Friend
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Price: $25.95 +0.82%

Rating Summary:
    22 Buy, 10 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 29 | Down: 43 | New: 4
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(Updated - November 28, 2012 8:57 AM EST)

Oppenheimer upgraded Fortinet (NASDAQ: FTNT) from Perform to Outperform with a price target of $24.00.

The firm comments, "Our upgrade is based on: 1) FTNT's clear market leadership
position in the UTM space, 2) solid fundamentals and 3) more reasonable valuation. FTNT is exposed to strong secular growth drivers and is focused on high-growth markets (up 20% YoY), and management continues to deliver solid, consistent execution. Given a recent retreat in share price, we view current levels as an attractive entry point for investors seeking ~20% revenue growth rates. While FTNT is not cheap from a P/E perspective, trading 31.5x our FY13E EPS of $0.61, our PT is also supported by 21.6x of free cash flow per share."

Oppenheimer also calls Fortinet a potential acquisition target. "FTNT is a pure-play small-cap company operating in a market seeing massive consolidation. As such, and given its founders' M&A track record (sold Netscreen to JNPR in 2004), we view it as a strong acquisition target by a networking, system integrator, or enterprise software company."

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 $19.18 yesterday.


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