'Gold Medal Acceleration': Fortinet (FTNT) Delivers Very Strong Beat and Outlook, Wall Street Bulled Up with At Least 10 PT Hikes
Fortinet (NASDAQ: FTNT) delivered better-than-expected Q2 results on the back of robust sales in the Americas and EMEA regions, earning at least 10 analyst upgrades as a result.
Revenue came in at $801.1 million to top the analysts’ estimates of $744.14 million. Earnings per share (EPS) came in at $0.95 to top the $0.87 per share consensus.
“We delivered our highest quarterly billings growth in over five years, led by the Americas and EMEA regions, while continuing to invest across our product portfolio,” said Ken Xie, Founder, Chairman, and Chief Executive Officer.
For the ongoing quarter, the company is forecasting sales between $800 million and $815 million and EPS between $0.90 and $0.95 a share. For full 2021, the company is looking to earn between $3.75 per share and $3.90 on sales between $3.21 billion to $3.25 billion.
“Fortinet’s customers are seeing the value in our holistic platform approach, which delivers integrated and automated security across a company’s on-premise network, endpoints, and cloud edges. We are pleased with our strong business momentum heading into the second half of the year and are delighted to once again raise full-year revenue and billings guidance.”
Cowen analyst Shaul Eyal raised the price target to $335.00 per share from $305.00 on the Outperform-rated stock.
“Coming much better than our bullish checks and Street's high estimates, FTNT delivered strong revenue/billings of $801.1M (+29.7% y/y)/$960.9M (+35.1% y/y). Outperformance was broad based, with exceptional 40.1% y/y Product growth underscored by mid-to-high end appliances, SD-WAN, and healthy mix of new/existing customers. All geos expanded nicely and cleared the +20% y/y growth rate,” Eyal wrote in a note.
“We believe FTNT is going through a higher multiple re-rating given accelerating metrics, consistent execution, and investors viewing it as a hybrid security provider (cloud/on-premise) with a bigger ratable revenue portion (~70% ratable),” the analyst added.
KeyBanc analyst Michael Turits also hiked the price target to $324.00 per share from $297.00 on a “very strong Q2 print and guide.”
“We reiterate our OW rating following a very strong 2Q with almost all key metrics again accelerating. Revenue/product/billings beat by 8%/20%/10% and accelerated to 30%/41%/35% y/y growth. Results were even stronger than our positive checks suggested. 3Q/FY21 guide meaningfully beat consensus. While positive for Fortinet, we also view the results as indicative of a strong security spending environment driven by recent breaches and by a secular restructuring of security architectures post-COVID,” Turits said in a memo.
Still, FTNT share price is down 1.2% just before New York opens Friday.