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Fortinet (FTNT) Touches 52-Week High on Solid Product Suite

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Shares of Fortinet Inc. (FTNT - Free Report) rallied to a 52-week high of $46.63, eventually closing a tad lower at $46.01 on Jan 19.

We believe that this provider of network security appliances is gaining from product ramp ups, deal wins and continuous growth of the network security market.

Fortinet stock has gained 42.9% in the past year, substantially outperforming the 14.7% rally of the industry it belongs to.



Influencing Factors in Detail

Fortinet’s network security solutions include firewall, VPN, application control, antivirus, intrusion prevention, web filtering, anti-spam and WAN acceleration.

Cyber security is becoming an essential requirement for the financial well-being, brand image and reputation of enterprises, and governments. Fortinet’s experience in the security space and continued delivery of mission-critical solutions helped it gain substantial market share in this segment.

Most recently, at Customer Electronics Show (CES) 2018, the company announced its security and threat protection abilities related to connected cars. Fortinet in association with Renesas Electronics has developed this technology that will be beneficial for preventing attacks on connected vehicle networks.

We believe that with the company’s sustained focus on enhancing its Unified Threat Management (UTM) portfolio through product development and acquisitions, the company is expected to retain its position in this sector, one of the fastest growing segments in network security, per industry analysis.

Per a recent report by Gartner, spending on enterprise security is expected to increase 8% year over year in 2018 to reach $96 billion. With all these initiatives, Fortinet is expected to make the most of the opportunity.

Additionally, Fortinet’s initiative to change its business model to subscription-based service provider is positively impacting its margins and bottom line.

However, this transformation, which is affecting the near-term results of the company and stiff competition from key network security players such as Cisco Systems Inc. (CSCO - Free Report) , Check Point (CHKP - Free Report) , Juniper Networks (JNPR - Free Report) and Palo Alto Networks remain headwinds.

Fortinet has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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