Fortinet Stock Soars 69% in 6 Months: Is it a Good Time to Invest?

Core Insights - Fortinet's shares have increased by 68.8% over the past six months, significantly outperforming the Zacks Computer & Technology sector's growth of 14.8% and the Zacks Internet - Software industry's return of 31.5% [1] - The company has outperformed key competitors in the cybersecurity market, including Cisco Systems, Palo Alto Networks, and Check Point Software Technologies, which saw share price increases of 31.5%, 16.5%, and 6% respectively [2] Company Performance - Strong demand for Fortinet's cybersecurity solutions is attributed to the robust Fortinet Security Fabric platform and its cloud-based offerings, contributing to the positive movement in share price [3] - Fortinet's Secure Networking solutions integrate networking and security through FortiOS, delivering up to 5x better performance than competitors [4] - The flagship product, FortiGate, continues to see robust adoption, significantly driving revenue growth [5] Business Segments - In Q3 2024, Unified SASE accounted for 23% of Fortinet's business, with a 130% increase in the pipeline, highlighting the company's unique position in offering a complete SASE solution [6] - A notable upsell deal in Q3 2024 involved a retail customer expanding its SD-WAN deployment to include FortiSASE for 16,000 users, showcasing the value of the FortiOS platform [8] - An eight-figure deal with a multinational bank was secured to protect its hybrid architecture, emphasizing Fortinet's strength in safeguarding large-scale enterprises [9] Financial Outlook - For Q4 2024, Fortinet expects revenues between $1.56 billion and$1.62 billion, with non-GAAP earnings projected at 58-62 cents per share, indicating a year-over-year revenue growth of 12.59% [10] - For the full year 2024, revenues are projected between $5.86 billion and$5.92 billion, with non-GAAP earnings expected to be $2.20-$2.28 per share, reflecting an 11.01% year-over-year growth in revenues [12] - Fortinet has a history of strong quarterly performance, with earnings surpassing estimates in the last four quarters, averaging a surprise of 23.58% [12] Strategic Initiatives - Fortinet plans to announce GenAI for FortiAI in early 2025, aiming to enhance AI-based security operations and integrate generative AI across its product portfolio [7] - The company's cutting-edge AI security solutions and expanding customer base position it for strong growth, currently holding a Zacks Rank 2 (Buy) and a Growth Score of A [13]