Core Insights - The article emphasizes the importance of understanding macro trends and their influence on asset prices and investor behavior, particularly in the context of equity analysis and research [1]. Group 1: Professional Background - The expert has over 10 years of experience in asset management, focusing on equity analysis, macroeconomics, and risk-managed portfolio construction [1]. - The professional background includes advising on and implementing multi-asset strategies, with a strong emphasis on equities and derivatives [1]. Group 2: Investment Philosophy - The goal of sharing insights is to make investing accessible, inspiring, and empowering for fellow investors [1]. - The expert encourages building confidence in long-term investing through shared knowledge and collaboration [1].

Core Insights - Climb has launched a strategic partnership with Fortinet, enhancing its cybersecurity solution offerings and providing significant opportunities for its reseller ecosystem [1][2][3] Company Overview - Climb is a global specialty technology distributor focusing on various IT sectors, including Security, Data Management, and Cloud solutions [8] - Climb is a wholly owned subsidiary of Climb Global Solutions, Inc. (NASDAQ: CLMB) [8] Partnership Details - The partnership with Fortinet allows Climb to offer enterprise-grade security solutions that provide deep automation and real-time protection across devices, data, and applications [2][6] - This collaboration is expected to amplify Climb's impact in the cybersecurity market and support its partners in addressing complex security challenges [3][6] Benefits to Resellers - Climb's reseller ecosystem will gain access to Fortinet's proven security solutions, enabling them to deliver trusted protection and performance to customers across various industries [2][4] - The partnership is designed to foster personalized engagement, allowing resellers to maintain close connections with their customers and provide tailored consultative guidance [7] Strategic Focus - Climb emphasizes a curated cybersecurity portfolio, ensuring that all solutions undergo a rigorous vetting process to guarantee effectiveness and reliability [6] - The company aims to avoid dilution in its offerings by focusing on both emerging innovators and established leaders like Fortinet [7]

Core Viewpoint - The article emphasizes a personal investment strategy focused on growth and dividend income, aiming for an easy retirement through a portfolio that generates monthly dividend income and benefits from reinvestment and annual increases [1]. Group 1: Investment Strategy - The strategy involves creating a portfolio that prioritizes compounding dividend income and growth [1]. - Monthly dividend income is a key component of the portfolio, which is structured to grow through reinvestment [1]. Group 2: Personal Position - The author has a beneficial long position in the shares of Cisco Systems (CSCO) through stock ownership, options, or other derivatives [1].

Core Viewpoint - The article emphasizes a personal investment strategy focused on growth and dividend income, aiming for an easy retirement through a portfolio that generates monthly dividend income and benefits from reinvestment and annual increases [1]. Group 1: Investment Strategy - The strategy involves creating a portfolio that prioritizes compounding dividend income and growth [1]. - Monthly dividend income is a key component of the strategy, which is designed to grow through reinvestment and yearly increases [1]. Group 2: Personal Position - The author has a beneficial long position in the shares of Cisco (CSCO), indicating confidence in the company's performance [1].

Core Insights - Cybersecurity is poised to become the next significant opportunity in the AI sector, potentially leading to long-term outperformance for cybersecurity stocks [1] - The rise of AI has enabled cybercriminals to launch more sophisticated and automated attacks, increasing the demand for cybersecurity solutions [3][4] - The integration of physical AI, such as autonomous vehicles and robots, presents new vulnerabilities that cybersecurity companies must address [6][7] Group 1: Cybersecurity Market Dynamics - The influx of cyberattacks will enhance the value of cybersecurity software, as businesses seek to protect sensitive information [3] - Cybersecurity companies generate annual recurring revenue through subscription models, leading to predictable cash flow and growth [9][10] - Companies like CrowdStrike and Palo Alto Networks have reported significant year-over-year increases in annual recurring revenue, indicating strong market demand [11] Group 2: Investment Opportunities - The growth of physical AI technologies creates additional revenue opportunities for cybersecurity firms as they develop solutions to protect these systems [8][12] - The current valuations of cybersecurity stocks are high, necessitating continued growth, which may be driven by advancements in AI [12] - As the AI landscape evolves, the digital infrastructure of cybersecurity companies will become increasingly valuable, particularly in safeguarding autonomous technologies [13]

Core Insights - The Zacks Security industry is experiencing strong demand for cybersecurity products due to the increasing need for secure networks and cloud-based applications, particularly in hybrid work environments [1] - Companies such as CrowdStrike, Fortinet, Okta, and Qualys are benefiting from these trends, although short-term growth may be hindered by economic slowdown and increased operating expenses [2] Industry Overview - The Zacks Security industry includes companies providing on-premise and cloud-based security solutions, addressing needs like identity access management, infrastructure protection, and malware analysis [3] - The industry is categorized into Computer Security, Cybersecurity, and Information Security, each focusing on different aspects of data protection [3] Major Trends - Rising cyber threats are driving demand for IT security solutions, with an increase in cyberattacks impacting both individual companies and national security [4] - Accelerated digital transformation and cloud migration are fueling growth, as various sectors become more reliant on technology, increasing their vulnerability to cyberattacks [5] - Macroeconomic headwinds may lead to delayed IT spending, as organizations conserve cash amid economic uncertainties [6] - High operating expenses related to R&D and sales efforts could pressure profit margins in the near term [7] Industry Performance - The Zacks Security industry ranks 56, placing it in the top 23% of nearly 250 Zacks industries, indicating solid near-term prospects [8] - The industry's earnings outlook is positive, with aggregate earnings estimates for 2025 revised up to $1.61 from $1.40 a year ago [10] - Over the past year, the industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500, gaining only 8.6% compared to 29.5% and 16.5% respectively [11] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-sales ratio of 12, higher than the S&P 500's 5.3 and the sector's 6.69 [14] Company Highlights - **Qualys**: A leading provider of information security solutions, benefiting from demand for cloud-based cybersecurity solutions. The consensus estimate for its 2025 earnings has been revised upward by approximately 8% to $6.91 per share [21][24] - **CrowdStrike**: A leader in endpoint protection and cyberattack response services, with a strong portfolio and growth driven by digital transformation. The consensus mark for its fiscal 2026 earnings remains at $3.67 per share [27][29] - **Fortinet**: Provides network security solutions and is benefiting from strong demand from large enterprises. The Zacks Consensus Estimate for its 2025 earnings has been revised upward by 13 cents to $2.65 per share [32][35] - **Okta**: A leading provider of identity security, experiencing increased traction in its solutions. The consensus mark for its fiscal 2026 earnings remains at $3.37 per share [38][40]

Core Viewpoint - Fortinet (FTNT) stock has experienced a decline of approximately 20% since being rated a buy at $98, now trading just under $79 due to weaker sales momentum and cautious market sentiment [1]. Company Performance - The stock price of Fortinet was initially recommended at $98 in August, but has since dropped to just under $79, indicating a significant decrease in value [1]. - The decline in stock price is attributed to weaker sales momentum, suggesting potential challenges in revenue generation [1]. Analyst Perspective - The analysis emphasizes a focus on clear and disciplined breakdowns of companies, prioritizing numerical data and underlying business performance over market narratives [1]. - The goal is to provide individual investors with an honest view of what is working, what isn't, and where the actual risks and opportunities lie [1].

Core Insights - CrowdStrike and Fortinet are leading companies in the cybersecurity sector, focusing on protecting organizations from cyberattacks [1][2] - The cybersecurity market is projected to grow at a CAGR of 12.45% from 2025 to 2030, driven by increasing cyber threats [2] CrowdStrike Overview - CrowdStrike's Falcon platform is a cloud-native security solution that secures various environments and endpoints [4] - The platform offers 29 cloud modules under a SaaS subscription model, with subscription sales increasing from 72% in fiscal 2017 to 95% in fiscal 2025 [5] - The Falcon Flex subscription model has been a key driver of customer growth, with 48% of subscription customers using six or more modules by the end of Q2 fiscal 2026 [6] - In Q2, CrowdStrike added $221 million in net new annual recurring revenues (ARR), bringing total ARR to $4.66 billion, a 20% increase year-over-year [7] - The company expects revenues for fiscal 2026 and 2027 to be $4.78 billion and $5.80 billion, respectively, indicating a year-over-year increase of around 21% [9][10] Fortinet Overview - Fortinet's Q3 2025 results showed a 14% year-over-year growth in both billings and revenues, with a record operating margin of 37% [11] - The company's SASE business saw significant growth, with Unified SASE billings increasing by 19% and FortiSASE billings rising over 100% [12] - Fortinet's product revenues grew by 18%, driven by demand for hardware upgrades and operational technology security [13] - However, service revenues grew only 13%, indicating slower growth compared to product revenues [14] - For full-year 2025 and 2026, Fortinet's revenue estimates are $6.75 billion and $7.50 billion, reflecting year-over-year increases of approximately 13.3% and 11% [15][16] Price Performance and Valuation - Year-to-date, CrowdStrike shares have increased by 43.4%, while Fortinet shares have decreased by 16.6% [17] - CrowdStrike is trading at a forward sales multiple of 21.97, while Fortinet is at 7.91, indicating higher growth expectations for CrowdStrike [19] - CrowdStrike's strong revenue visibility and growth prospects justify its higher valuation compared to Fortinet [22] Conclusion - CrowdStrike is recommended as a strong buy due to its leadership in the cybersecurity space and robust growth potential, while Fortinet is suggested for holding or waiting for better entry points [22][23]

Core Viewpoint - A class action securities lawsuit has been filed against Fortinet, Inc. for alleged securities fraud affecting investors between November 8, 2024, and August 6, 2025 [1][2]. Group 1: Lawsuit Details - The lawsuit claims that Fortinet's management made false statements regarding the refresh cycle of their products, suggesting it would be more profitable than it actually was, as it involved old products that represented a "small percentage" of the Company's business [2]. - It is alleged that Fortinet misrepresented the number of FortiGate firewalls eligible for upgrades and that the refresh momentum was overstated, with approximately half of the refresh completed in just a few months by the end of Q2 2025 [2]. Group 2: Investor Information - Investors who suffered losses during the specified timeframe have until November 21, 2025, to request appointment as lead plaintiff, although participation in any recovery does not require serving in this role [3]. - Class members may be entitled to compensation without any out-of-pocket costs or fees, indicating no financial obligation to participate in the lawsuit [3]. Group 3: Legal Firm Background - Levi & Korsinsky, LLP has a history of securing hundreds of millions of dollars for shareholders and is recognized as one of the top securities litigation firms in the United States, with over 70 employees dedicated to serving clients [4].

Core Viewpoint - Fortinet, Inc. is facing a securities fraud class action lawsuit due to misleading statements regarding its business operations and financial performance, particularly related to its firewall upgrade cycle and revenue guidance [4][2]. Group 1: Lawsuit Details - The lawsuit is based on allegations that Fortinet made materially false and misleading statements during the class period from November 8, 2024, to August 6, 2025 [4][5]. - The company reported that it was only "approximately 40% to 50% of the way through the 2026 firewall upgrade cycle" by the end of Q2 2025, which contradicted earlier expectations [2][4]. - Following the release of disappointing financial results and guidance, Fortinet's stock price dropped by $21.28, or 22%, closing at $75.30 per share on August 7, 2025 [3][2]. Group 2: Financial Performance - Fortinet's revenue guidance for Q3 2025 was projected between $1.67 billion and $1.73 billion, which was weaker than market expectations [2]. - The lawsuit claims that the refresh cycle for Fortinet's products was not as lucrative as represented, and the company misrepresented the number of firewalls eligible for upgrades [4]. Group 3: Investor Actions - Investors who acquired Fortinet common stock during the class period are urged to participate in the lawsuit, with a deadline set for November 21, 2025, to seek lead plaintiff status [5][4].