Investors with a lot of money to spend have taken a bullish stance on Fortinet (NASDAQ:FTNT).And retail traders should know.We noticed this today when the trades showed up on publicly available options history that we track here at Benzinga.Whether these are institutions or just wealthy individuals, we don't know. But when something this big happens with FTNT, it often means somebody knows something is about to happen.So how do we know what these investors just did? Today, Benzinga's options scanner spotted ...

Core Insights - Palo Alto Networks and Cisco Systems are prominent players in the cybersecurity sector, with Palo Alto focusing on next-generation firewalls and cloud security, while Cisco emphasizes Threat Intelligence and Secure Access Service Edge (SASE) offerings [1][2] Industry Overview - The cybersecurity market is expected to grow at a CAGR of 12.45% from 2025 to 2030, driven by increasing complex attacks such as credential theft and social engineering [2] Palo Alto Networks Analysis - Palo Alto Networks is recognized as a leader in cybersecurity, providing comprehensive solutions for network and cloud security [4] - The company is experiencing significant growth in its SASE segment, with Annual Recurring Revenues (ARR) increasing by 34% year over year [6] - Next Generation Security (NGS) ARR grew 29% year over year, reaching $5.85 billion, driven by a platformization strategy [7] - The number of customers with over $5 million in NGS ARR rose to nearly 170, indicating deeper platform usage [8] - Palo Alto Networks has raised its long-term NGS ARR target to $20 billion by fiscal 2030, up from a previous target of $15 billion [9] Cisco Systems Analysis - Cisco Systems is making progress in its security business with new product offerings, but its security revenues dropped 2% year over year due to declining demand for older products [10][14] - The company has seen good customer adoption of its new security solutions, with almost 3,000 customers purchasing these products in the first quarter of fiscal 2026 [11] - Cisco's next-generation firewalls orders grew in the mid-teens range, but the overall security business remains weaker compared to its networking segment [13][15] Comparative Growth Outlook - Palo Alto Networks is projected to have a stronger growth profile, with fiscal 2026 revenues and EPS expected to increase by 13% and 13.2%, respectively [16] - In contrast, Cisco Systems' fiscal 2026 estimates indicate a more modest growth of 7.3% for both revenues and EPS [19] Price Performance and Valuation - Year-to-date, Palo Alto Networks shares have appreciated by 1.7%, while Cisco Systems shares have surged by 27.5% [21] - Cisco is trading at a forward sales multiple of 4.89X, compared to Palo Alto Networks' 12.61X, reflecting higher growth expectations for Palo Alto [23] Conclusion - Palo Alto Networks' leadership in cybersecurity provides strong revenue visibility, justifying its higher valuation compared to Cisco Systems [27] - Cisco Systems faces execution risks and a slower growth trajectory, suggesting a hold or wait strategy for investors [27][28]

Core Insights - Fortinet, Inc. is a cybersecurity company with a market cap of $64.5 billion, offering a range of security solutions including next-generation firewalls and cloud security [1] Performance Overview - Over the past 52 weeks, Fortinet's shares have increased by 6.9%, underperforming the S&P 500 Index which rose by 17.4% [2] - Year-to-date, Fortinet's stock is down 10.9%, while the S&P 500 has surged by 16% [2] - Fortinet has also lagged behind the Xtrackers Cybersecurity Select Equity ETF, which saw a 12.4% increase over the past year and a 9.7% rise year-to-date [3] Financial Performance - In Q2, Fortinet reported total revenue of $1.6 billion, a 13.6% year-over-year increase, slightly exceeding consensus estimates [4] - Net income for the same quarter rose by 15.9% to $440.1 million, and cash flow from operations increased by 12.2% to $1.3 billion [4] - The company's fiscal 2025 revenue guidance of $6.7 billion to $6.8 billion fell short of Wall Street expectations, negatively impacting investor sentiment [5] Earnings Expectations - Analysts project Fortinet's EPS to grow by 5.7% year-over-year to $2.21 for the current fiscal year ending in December [5] - Fortinet has a strong earnings surprise history, having exceeded consensus estimates in each of the last four quarters [5] Analyst Ratings - Among 42 analysts covering Fortinet, the consensus rating is a "Hold," with nine "Strong Buy," 30 "Hold," one "Moderate Sell," and two "Strong Sell" ratings [6] - This rating configuration has become less bullish compared to three months ago, where 14 analysts previously suggested a "Strong Buy" [7] - A recent price target of $87 was maintained by Jonathan Ruykhaver from Cantor Fitzgerald, indicating a potential upside of 3.3% from current levels [7]

Core Insights - OMC Financial Services LTD has acquired a new equity position in Palo Alto Networks, purchasing 21,730 shares valued at approximately $4.42 million during Q3 2025 [1][2] - As of September 30, 2025, Palo Alto Networks constituted 1.64% of OMC's total U.S. equity holdings of $269.47 million, ranking outside the fund's top five holdings [2] - Palo Alto Networks' stock price was $211.82 as of October 20, 2025, reflecting an 11.95% gain over the past year, although it underperformed the S&P 500 by 1.8 percentage points [2] Company Overview - Palo Alto Networks is a leading provider of cybersecurity solutions with a comprehensive portfolio that includes hardware, software, and cloud-based offerings [4] - The company serves a diverse clientele, including medium to large enterprises, service providers, and government entities across various sectors such as financial services, healthcare, and telecommunications [6] - As of October 20, 2025, Palo Alto Networks had a market capitalization of $143.38 billion, with a trailing twelve-month (TTM) revenue of $9.22 billion and a net income of $1.13 billion [3] Financial Performance - Palo Alto Networks reported a 15% year-over-year revenue growth, reaching $9.2 billion for the fiscal year 2025, with expectations of continued double-digit growth in fiscal 2026, forecasting revenue around $10.5 billion [8] - The company's forward price-to-earnings ratio was approximately 50 following its fiscal fourth-quarter earnings report, indicating a high valuation despite strong performance [7] Strategic Positioning - The rise of quantum computing presents both a challenge and an opportunity for cybersecurity firms, as quantum devices could potentially breach existing cybersecurity measures [9] - Palo Alto Networks has introduced defenses against quantum computing attacks, positioning itself competitively as the adoption of quantum technology increases [10]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $762 million, representing a 25% year-over-year increase and exceeding the high end of guidance [7][28] - Free cash flow was $244 million, with a free cash flow margin of 32% [9][37] - Gross profit was $612 million, with a gross margin of 80.3%, down from 81.7% in the previous quarter and 83.3% year-over-year [33][34] - Operating income was $167 million, resulting in a 22% operating margin, compared to 24% last quarter and 27% in the year-ago quarter [36] Business Line Data and Key Metrics Changes - 80% of customers were using two or more products, up from 82% a year ago, and 51% were using four or more products, up from 47% [9] - FlexLogs exceeded $50 million in ARR, achieving this milestone in six quarters, the fastest ramp seen [10] - Database monitoring product is approaching $50 million in ARR, growing 60% year-over-year [11] Market Data and Key Metrics Changes - The number of AI native customers represented about 8.5% of Q1 ARR, up from 6% last quarter and 3.5% a year ago [28] - Dollar bookings for new logos increased over 70% year-over-year, with 11 deals signed with a TCV of $10 million or more, up from one in the year-ago quarter [12][13] Company Strategy and Development Direction - The company continues to focus on digital transformation and cloud migration as long-term growth drivers [27] - Investments are being made in AI observability and analysis, with over 4,000 customers using Datadog AI integrations, doubling year-over-year [13][14] - Recent acquisitions include EPO and MetaPlan, aimed at enhancing product offerings in feature management and data observability [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges various economic challenges but maintains a positive outlook on long-term market opportunities [27] - The company is well-positioned to assist clients with cloud migration and digital transformation [42] - Management expects revenue for Q2 2025 to be in the range of $787 million to $791 million, representing 22% to 23% year-over-year growth [38] Other Important Information - The company ended the quarter with $4.4 billion in cash, cash equivalents, and marketable securities [37] - The trailing twelve-month net revenue retention percentage was in the high 110s, with gross retention stable in the mid to high 90s [30] Q&A Session Summary Question: Comment on the opportunity with AI-generated code - Management sees a shift in value from writing code to observing and understanding it in production environments, emphasizing the importance of validation and performance [45][48] Question: What attributed to the strong booking stats? - Strong pipeline and increased investments in go-to-market strategies contributed to the booking strength, with no significant impact from economic uncertainties observed [49][52] Question: Trend lines on cloud migration - Cloud migration remains steady, with consistent customer desire to move to the cloud as a prerequisite for adopting AI [58][59] Question: Expansion opportunities in data observability - The company views data observability as a significant opportunity, especially with the integration of MetaPlan to enhance data quality and pipeline management [60][64] Question: Guidance and gross margin changes - The guidance reflects recent trends, with a focus on maintaining conservatism while acknowledging higher cloud costs and the need for optimization [68][73]