Fortinet falls even as the 'Ja Morant of cyber security' shows robust growth
Fortinet (NASDAQ:FTNT) shares shed earlier gains and fell in late Thursday trading even after the cyber security company posted strong first-quarter results and raised full-year guidance, prompting Wedbush Securities to call it the "Ja Morant of cyber security," likening the company to the star NBA player.
Analyst Dan Ives said the first-quarter results were "impressive," adding that billings was "the star of the show," with the metric coming in at $1.16 billion, up 36% year-over-year, compared to estimates of $1.08 billion.
"The company continues to see a strong demand environment for its SDWAN solution set, as it appears the current backdrop is continuing to accelerate deal flow in some cases as the [Fortinet] product architecture continues to be a high priority [return on investment] purchase with cyber security front and center for CIOs," Ives wrote in a note to clients.
Ives, however, lowered Fortinet's (FTNT) per-share price target to $340 from $370, citing a lower earnings multiple.
Fortinet (FTNT) shares fell nearly 2% to $281.92 after having been up more than 6.5% earlier. 
On Wednesday, Fortinet (FTNT) said it earned 94 cents per share on $954.8 million in revenue during the first-quarter, compared to estimates of 80 cents per share and $886.45 million. 
For the second-quarter, Fortinet (FTNT) expects revenue to be between $1.005 billion and $1.035 billion, with billings between $1.225 billion and $1.265 billion. Non-GAAP gross margins are expected to be between 74.5% and 76%, with non-GAAP operating margins between 22% and 23.5%.
For the full-year, Fortinet (FTNT) revenue is likely to be between $4.35 billion and $4.4 billion, with billings between $5.5 billion and $5.58 billion. 
In addition, Ives noted that the raised full-year guidance is a sign that Fortinet (FTNT) is operating in a "sweet spot product cycle" and the broader cyber security industry is seeing "massive strength" due to an increase in federal spending.
Last month, Goldman Sachs noted that Fortinet (FTNT) was among the tech stocks with the highest and most stable gross margins going into earnings season.




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