Zscaler, CrowdStrike looking good; Fortinet, not so much: Jefferies
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Itâs a mixed bag for cybersecurity purveyors, according to Jefferies.
The firm upgraded CrowdStrike Holdings (NASDAQ:CRWD) and Zscaler (NASDAQ:ZS) to Buy from Hold, and downgraded Fortinet (NASDAQ:FTNT) to Hold from Buy, analysts led by Joseph Gallo, wrote in a note.
The environment remains challenged, but Jefferies has seen enough data to become increasingly positive on the high growth platforms which it believes will continue to benefit from secular themes. 
On the other hand, Fortinet (FTNT) is likely to continue feeling hardware headwinds for several quarters. 
Jefferiesâs field work and survey show stabilization in the pipeline after a summertime lull with much optimism as 2024 budgeting evolves. Zscaler (ZS) and CrowdStrike (CRWD), both considered to be high-growth platforms, are likely to benefit the most. 
The firm noted that Palo Alto Networks (PANW) has remained a top performer and Microsoft (MSFT) âwill not be an impact.â 
Zscaler (ZS) got a price target boost to $225 from $170. The pioneer in network security is âamong the best placed for the distributed and cloud-based world.â Zscaler (ZS) is still in the early stages of monetizing the opportunity of a total addressable market of $60B in 2023 and showing a compound annual growth rate of 13%. 
CrowdStrike (CRWD) got the same price target move, though until recently, Jefferies has remained cautious on the name given macro headwinds. However, survey results are showing that itâs well-positioned in the long run. âCRWD's continued hyper focus to move horizontally beyond endpoint & security as LogScale blurs the lines between cyber/ infrastructure, makes CRWD more ingrained with customers," Jefferies explained.
Fortinet (FTNT) had its price target cut to $65 from $85. Jefferies is favorable on the stock long-term, but demand has been weaker as of late for the companyâs products. âFTNT will also likely have to invest in R&D/Capex to bolster its SASE portfolio which could limit FCF expansion," the firm wrote.
Analysts are largely bullish on Zscaler (ZS). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates the stock a HOLD.
Analysts are mixed on Crowdstrike (CRWD). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a STRONG BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates the stock a HOLD.
Analysts are largely bullish on Fortinet (FTNT). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates the stock a HOLD.

More on CrowdStrike, Fortinet, etc.

Fortinet: A Strong Bargain In The Growing Cybersecurity Sector
CrowdStrike: Priced For Perfection (Rating Downgrade)
CrowdStrike: Still In The Strike Zone
Fortinet drops amid Barclays downgrade
CrowdStrike director sells shares worth $2.65M - filing