Fortinet drops amid Barclays downgrade
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Fortinet (NASDAQ:FTNT) was downgraded at Barclays in a preview of cybersecurity companies.
The firm pushed its rating on the tech company to Equal Weight from Overweight as it said the risk-reward is balanced.
Varonis Systems (VRNS) was upgraded in the same note, with the analysts citing a good set up for the third quarter with more interest seen in software-as-a-service and 2024 catalysts. 
Channel checks for Fortinet (FTNT) were a bit more negative than expected and in a survey of chief investment officers, Barclays found lower prioritization of firewall refreshes. Finally, it sees risks to the multiple of 23x 2024 free cash flow. 
Barclay lowered its third-quarter billings estimate to the bottom half of the guide given those negative checks. 
âLonger term, we like FTNT's platform approach and think the stock has terminal value, but we see a balanced risk/reward which underpins our Equal Weight rating,â Barclays analysts led by Saket Kalia wrote in a note. 
Fortinet (FTNT) dropped 2.6% before the open on Friday.
At Check Point Software (CHKP), Barclays modeled a 3% year-over-year decline in total billings growth for the third-quarter, which is below Street estimates.
Barclays was more positive on Cyberark Software (CYBR) where checks were strong and the analysts see upside to annual recurring revenue and sustainably positive margins. 
On Tyler Technologies (TYL), revenue and SaaS bookings face tough comparisons this quarter from COVID-related revenue and a couple of big SaaS deals last year. 
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.

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