Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Fortinet (FTNT) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [2][12]. Earnings Growth - Fortinet has a historical EPS growth rate of 42%, with projected EPS growth of 33.6% for the current year, surpassing the industry average of 30.1% [5][4]. Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 34.6%, significantly higher than the industry average of -14.4% [6]. Over the past 3-5 years, Fortinet's annualized cash flow growth rate has been 34.5%, compared to the industry average of 15.2% [7]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Fortinet, with the Zacks Consensus Estimate for the current year increasing by 7.8% over the past month [9][10]. This trend supports the stock's Zacks Rank of 1 (Strong Buy) [10].

Group 1 - Fortinet (FTNT) is outperforming its peers in the Computer and Technology sector, with a year-to-date return of 60.6% compared to the sector average of 28.3% [4] - The Zacks Rank for Fortinet is 1 (Strong Buy), indicating strong analyst sentiment and an improving earnings outlook [3][4] - The Zacks Consensus Estimate for Fortinet's full-year earnings has increased by 9.4% over the past quarter, reflecting positive analyst sentiment [4] Group 2 - Fortinet is part of the Internet - Software industry, which has an average year-to-date return of 31.7%, further highlighting Fortinet's strong performance [6] - Another stock in the same sector, Innovid Corp. (CTV), has also shown significant performance with a year-to-date increase of 100.7% and a Zacks Rank of 1 [5][6] - Both Fortinet and Innovid Corp. are expected to continue their solid performance, making them attractive options for investors in the Computer and Technology sector [7]

Fortinet, Inc. Conference Call Summary Company Overview - **Company**: Fortinet, Inc. (NASDAQ:FTNT) - **Event**: Needham Security, Networking, & Communications Conference - **Date**: November 19, 2024 - **Participants**: - Keith Jensen - CFO - John Whittle - COO - Christiane Ohlgart - Chief Accounting Officer Key Points Financial Guidance and Growth Targets - Fortinet aims for billings and revenue growth above 12% over the next three to five years, with operating margins above 30% and adjusted free cash flow in the mid to high 30% range [3][4][5] - The growth guidance considers market complexities, including the diversification of product offerings beyond just firewalls to include SecOps and SASE solutions [4] - Operating margins have improved, with a target of 30% being set as a new average, up from a previous floor of 25% [5][6] Sales Capacity and Investments - Fortinet plans to increase its quota-carrying sales representatives and invest in infrastructure, including data centers, to support SASE and SecOps rollouts [7][8] - The company is shifting towards owning its data centers to reduce costs and improve service delivery, moving away from reliance on third-party cloud providers [8][9] Billings and Sales Cycle - Q4 billings are expected to show mid-single-digit growth, although some large deals are taking longer to close due to increased scrutiny and collaboration with existing customers [10][11][13] - The maturation process for large deals is slower, with existing customers being more cautious about timing and readiness for new solutions [13] Product Revenue and Market Trends - Product revenue turned positive for the first time in several quarters, with double-digit growth quarter-over-quarter excluding backlog [14][15] - Fortinet anticipates a significant refresh opportunity in 2026 due to a large number of devices reaching end-of-support, which could generate $400 million to $450 million in new product revenue [21][19] Gross Margins and Pricing Strategy - Fortinet has achieved record gross margins, with product gross margins expected to normalize around 67% and total gross margins between 79% to 80% [24][26] - The company is using discounting strategically to drive customer acquisition, particularly in the US enterprise market [29] SASE and SD-WAN Opportunities - The upcoming SD-WAN renewals in 2025 and 2026 are seen as a gateway for upselling SASE solutions to existing customers [30][31] - Fortinet is focusing on the ease of integrating SASE with existing SD-WAN deployments, although the transition may take time due to competitive displacement [31] SecOps Growth - Strong growth is noted in the SecOps segment, particularly with products like FortiEDR and FortiClient, as the company focuses on expanding its solution suite [36][37] - The integration of AI into products is ongoing, with over 500 AI-related patents, and the company is leveraging generative AI for enhanced security operations [44][45] Public Sector and Federal Business - The federal sector represents about 2% to 3% of Fortinet's business, with a broader government business (including SLED) accounting for 10% to 12% [43] - Recent organizational changes have separated the federal business to enhance focus and responsiveness to the unique needs of government clients [43] Conclusion - Fortinet's strategic focus on growth through product innovation, market expansion, and operational efficiency positions it well for future opportunities, particularly in the SASE and SecOps markets [46]

Fortinet, Inc. (NASDAQ:FTNT) Needham Security, Networking, & Communications Conference November 19, 2024 9:30 AM ET Company Participants Keith Jensen - CFO John Whittle - COO Christiane Ohlgart - Chief Accounting Officer Conference Call Participants Matt Dezort - Needham Matt Dezort Good morning. And welcome, everyone, to Needham Tech Week. My name is Matt Dezort, senior security analyst here at Needham. It's my pleasure to welcome next to the virtual stage the management team of Fortinet. We've been joined ...

The cybersecurity industry is forecast to grow meaningfully over the next several decades.*Stock prices used were the afternoon prices of Nov. 15, 2024. The video was published on Nov. 17, 2024. ...

Earnings Growth and Stock Performance - Fortinet's stock has surged nearly 70% since August 2024, driven by strong quarterly results [1] - The company's Q3 2024 revenue reached $1.51 billion, a 13% YoY increase, surpassing analysts' expectations of $1.48 billion [4] - Non-GAAP earnings per share jumped 54% YoY to $0.63, significantly higher than the guidance of $0.51 [4] - Full-year revenue guidance was raised to $5.89 billion, with non-GAAP earnings expected to reach $2.24 per share, a 37% YoY increase [11] Margin Expansion and Revenue Mix - Non-GAAP operating margin increased from 27.8% to 36.1% YoY, driven by higher services revenue [5] - Services revenue grew 19% YoY to $1.03 billion, while product revenue grew only 1.7% to $474 million [6] - Services business now accounts for 68% of total revenue, up from 65% in the same quarter last year [7] - Services gross margin is 88.5%, compared to 68.4% for the product segment [6] Growth Drivers: SecOps and SASE - Fortinet's AI-focused SecOps offerings grew 32% in billings, accounting for 10.5% of total billings [8] - Demand for AI-driven SecOps is projected to reach $163 billion by 2028, growing at a 13% annual rate [9] - Unified SASE bookings increased 14% YoY, with revenue up 27% [10] - Demand for unified SASE is forecast to grow at a 16% annual rate, reaching $46 billion by 2028 [9] Future Revenue Pipeline - Remaining performance obligations (RPO) increased 15% YoY to $6.1 billion, indicating a stronger future revenue pipeline [10] - Consensus estimates project a 20% annual earnings growth for the next five years, potentially reaching $5.57 per share by 2029 [13] - If the stock trades at 30 times earnings in five years, it could reach $167, representing a 72% increase from current levels [13]

ATLANTA, Nov. 15, 2024 (GLOBE NEWSWIRE) -- John Whittle, Chief Operating Officer at Fortinet "With our new space in Atlanta set to become one of our global Innovation Hubs, we'll be able to better serve our growing customer base in this region as we build on the partnerships created across industries in Georgia over the past 24 years. Through our global Innovation Hubs, Fortinet is committed to enhancing our infrastructure and innovation to continue to deliver unmatched experiences and solutions to customer ...

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Fortinet (NASDAQ: FTNT ) reported 3Q24 earnings, and the stock dipped 5% in early post-market trading on Thursday as the company cut its full-year billings guidance to $6.43 billion- $6.53 billion, below the prior range of $6.4 billion- $6.6 billion. The market disgusted the bad news quickly, and theI’m a retired Wall Street PM specializing in TMT; my educational background is a bachelor's in Finance and Economics, and an MBA from Columbia, after which I directly began my career on Wall Street. Since kickst ...

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