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The cybersecurity firm projects revenues between $1.38 billion and $1.44 billion. The Zacks Consensus Estimate for the same is pegged at $1.41 billion, suggesting year-over-year growth of 9.93%.
The company forecasts fourth-quarter non-GAAP earnings in the range of 42-44 cents per share. The consensus mark is pegged at 43 cents per share, implying a decline of 2.27% from the year-ago figure of 24 cents.
Fortinet’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.21%.
For the October-December quarter, Fortinet anticipates billings in the band of $1.56-$1.7 billion. The company’s fourth-quarter performance is expected to have benefited from the steady yet slow adoption of its security and networking products in the prevailing hybrid working environment and the accelerated emergence of digital technologies.
The rapid adoption of FortiGate-based secure Software-Defined Wide Area Network (SD-WAN) offerings is likely to have supported FTNT’s Product segment. Our model estimates Product revenues in the fourth quarter to be $494.3 million, suggesting a year-over-year decline of 8.5%.
FortiGuard security subscriptions and FortiCare technical support services are likely to have gained solid traction, favoring the company’s Services segment. Our model estimate for quarterly Services revenues is pegged at $905.3 million, indicating a year-over-year improvement of 21.9%.
Fortinet’s fourth-quarter performance is likely to have gained from higher global cybersecurity spending. The growing adoption of SD-WAN solutions might have acted as a tailwind. Per MarketsandMarkets, the market size for SD-WAN solutions is likely to reach $13.7 billion by 2027 from $3.4 billion in 2022, witnessing a CAGR of 31.9%.
As one of the broadest security service providers globally, FTNT’s FortiTrust, a unified solution with a single user-based licensing model for flexible consumption across networks, endpoints and clouds, has been witnessing solid traction. This might have driven the company’s private and public cloud billings.
However, softness in overall IT spending is likely to negatively impact the company’s fourth-quarter results. Organizations are pushing back their big and expensive IT investments amid growing recessionary concerns.
Our model estimate for Billings in the fourth quarter is pegged at $1.632 billion, suggesting a year-over-year decline of 5%.
What Our Model Says
Our proven model predicts an earnings beat for Fortinet this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
FTNT has an Earnings ESP of +3.79% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With Favorable Combination
Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:
Fabrinet (FN - Free Report) has an Earnings ESP of +2.13% and sports a Zacks Rank #1 at present. The company is scheduled to report second-quarter fiscal 2024 results on Feb 5. Shares of FN have rallied 80% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Twilio (TWLO - Free Report) has an Earnings ESP of +31.37% and a Zacks Rank #2 at present. Twilo is set to announce fourth-quarter 2023 results on Feb 14. Shares of TWLO have jumped 17.6% in the past six months.
Bill Holdings (BILL - Free Report) has an Earnings ESP of +6.17% and a Zacks Rank #3 at present. Bill Holdings is set to announce second-quarter fiscal 2024 results on Feb 8. Shares of BILL have plunged 32.3% in the past six months.
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Fortinet (FTNT) to Report Q4 Earnings: What's in the Offing?
Fortinet (FTNT - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 6, after market close.
The cybersecurity firm projects revenues between $1.38 billion and $1.44 billion. The Zacks Consensus Estimate for the same is pegged at $1.41 billion, suggesting year-over-year growth of 9.93%.
The company forecasts fourth-quarter non-GAAP earnings in the range of 42-44 cents per share. The consensus mark is pegged at 43 cents per share, implying a decline of 2.27% from the year-ago figure of 24 cents.
Fortinet’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.21%.
Fortinet, Inc. Price and EPS Surprise
Fortinet, Inc. price-eps-surprise | Fortinet, Inc. Quote
Factors to Consider
For the October-December quarter, Fortinet anticipates billings in the band of $1.56-$1.7 billion. The company’s fourth-quarter performance is expected to have benefited from the steady yet slow adoption of its security and networking products in the prevailing hybrid working environment and the accelerated emergence of digital technologies.
The rapid adoption of FortiGate-based secure Software-Defined Wide Area Network (SD-WAN) offerings is likely to have supported FTNT’s Product segment. Our model estimates Product revenues in the fourth quarter to be $494.3 million, suggesting a year-over-year decline of 8.5%.
FortiGuard security subscriptions and FortiCare technical support services are likely to have gained solid traction, favoring the company’s Services segment. Our model estimate for quarterly Services revenues is pegged at $905.3 million, indicating a year-over-year improvement of 21.9%.
Fortinet’s fourth-quarter performance is likely to have gained from higher global cybersecurity spending. The growing adoption of SD-WAN solutions might have acted as a tailwind. Per MarketsandMarkets, the market size for SD-WAN solutions is likely to reach $13.7 billion by 2027 from $3.4 billion in 2022, witnessing a CAGR of 31.9%.
As one of the broadest security service providers globally, FTNT’s FortiTrust, a unified solution with a single user-based licensing model for flexible consumption across networks, endpoints and clouds, has been witnessing solid traction. This might have driven the company’s private and public cloud billings.
However, softness in overall IT spending is likely to negatively impact the company’s fourth-quarter results. Organizations are pushing back their big and expensive IT investments amid growing recessionary concerns.
Our model estimate for Billings in the fourth quarter is pegged at $1.632 billion, suggesting a year-over-year decline of 5%.
What Our Model Says
Our proven model predicts an earnings beat for Fortinet this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
FTNT has an Earnings ESP of +3.79% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With Favorable Combination
Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:
Fabrinet (FN - Free Report) has an Earnings ESP of +2.13% and sports a Zacks Rank #1 at present. The company is scheduled to report second-quarter fiscal 2024 results on Feb 5. Shares of FN have rallied 80% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Twilio (TWLO - Free Report) has an Earnings ESP of +31.37% and a Zacks Rank #2 at present. Twilo is set to announce fourth-quarter 2023 results on Feb 14. Shares of TWLO have jumped 17.6% in the past six months.
Bill Holdings (BILL - Free Report) has an Earnings ESP of +6.17% and a Zacks Rank #3 at present. Bill Holdings is set to announce second-quarter fiscal 2024 results on Feb 8. Shares of BILL have plunged 32.3% in the past six months.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.