Fortinet (FTNT - Free Report) recently announced that its FortiGate Secure Software-Define Wide Area Network (SD-WAN) has been adopted and deployed by French retail group Volkswagen Groupe Retail France across more than 70 branches.
The company’s next-generation firewalls have enabled its SD-WAN capabilities to help Volkswagen Groupe adopt a hybrid WAN that will connect various WANs and route traffic over several links including Multiprotocol Label Switching.
This solution aided Volkswagen Groupe to achieve a secure LAN and WAN integration, thereby allowing it to differentiate various types of traffic across its WAN. This assists Volkswagen Groupe to manage latency and focus on business-critical applications and traffic.
Growing customer accounts bode well for Fortinet as the upside is helping the company boost its revenue growth.
In the past year, shares of the company have returned 64.7%, outperforming its industry and the S&P 500 Composite, which have grown 30.9% and 7.9%, respectively.
What is Pushing the Stock Up
Fortinet’s rich experience in the security space and a steady delivery of mission-critical solutions are aiding it to maintain and expand its market share in the cyber security space.
Moreover, the growing acceptance of its SD-WAN solutions is a key growth driver.
Further, Fortinet’s Security Fabric, which connects different security tools to collect, coordinate and respond to any suspicious behavior detected on the client’s network, is also witnessing strong global demand owing to digital transformation across most industries.
Notably, strength in the overall product suite of Security Fabric is allowing it to penetrate the enterprise market and drive its share in the same. Moreover, last year’s acquisitions of ZoneFox and Bradford Networks, which enhanced Security Fabric with additional product capabilities, are likely to boost further growth.
A robust response to the FortiGate Next-Generation Firewalls E-series products, software sales and rise in the fabric platform solutions drove the 24% year-over-year growth rate of Fortinet’s Products segment in fourth-quarter 2018.
Notably, Fortinet and Symantec recently inked a partnership deal to provide customers with comprehensive and sturdy security solutions across endpoint network and cloud environments.
The company expects a strong uptake of its secure SD-WAN offerings, Security Fabric architecture and the recently-announced high performance FortiGate Next-Generation Firewalls E-series product menu over the next few years.
IDC expects SD-WAN market to witness a CAGR of 40.5% over the 2017-2022 time period for reaching a market value of $4.5 billion in 2022. Moreover, Gartner predicts that 50% of new firewall purchases in the distributed network will utilise SD-WAN features by 2023. Being the only vendor, offering both security and SD-WAN solutions, the company is well-positioned to capitalize on the teeming opportunities in the market.
Zacks Rank and Other Key Picks
Fortinet currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the same sector are Synopsys, Inc. (SNPS - Free Report) , eGain Corporation (EGAN - Free Report) and AMETEK, Inc. (AME - Free Report) , each carrying the same top Zacks Rank of 1 as Fortinet. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Synopsys, eGain and Ametek is projected to be 10%, 30% and 9.58%, respectively.
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