Fortinet (FTNT) Remains Cheap and Steady Growing Ahead of Coming SolarWinds Lift - William Blair

William Blair analyst Jonathan Ho reiterated an Outperform rating and {REMOVEPT} price target on Fortinet (NASDAQ: FTNT) after the company delivered a strong rebound quarter, beating expectations across all metrics. Billings growth of 23.3% accelerated sequentially and exceeded the consensus by $48.5 million. Product revenue grew by 21%, with SD-WAN now making up 13% of fourth-quarter billings. Guidance was offered above the consensus for revenue at 18% growth and billings at 17% growth (both at the midpoint).Fortinet indicated that it did not experience an immediate benefit from the SolarWinds (NYSE: SWI) breach, but expects security spending to increase over time as a result of the breach.

The stock closed trading about 22.5 times our revised free cash flow estimate of $1.167 billion for 2022, which we view as a relatively inexpensive valuation. We believe investors may be underappreciating Fortinet’s diversification efforts and the success it is seeing selling a broader set of products into its base as a platform. Ultimately, this should lead to greater sustainability in growth over time.

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 $155.48 yesterday.

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