On Thursday, Rosenblatt Securities adjusted its stock price target for Fortinet (NASDAQ:FTNT), a global leader in broad, integrated, and automated cybersecurity solutions, ahead of its third-quarter earnings report scheduled for November 7, 2024. The firm's analyst maintained a "Buy" rating on the stock and increased the price target from $72.00 to $85.00.
The analyst noted that despite potential headwinds from an election-driven slowdown that may have affected some resellers in the third quarter, Fortinet's competitive pricing and robust firewall offerings have contributed to market share gains. Resellers have indicated a strong pipeline as the company moves into the fourth quarter, which is traditionally a strong period for cybersecurity sales.
The decision to raise the stock price target to $85 is based on an increase in the enterprise value to 2025 sales multiple from 8 times to 9.6 times. This valuation represents a premium compared to the current average of 8.9 times among Fortinet's peers.
The premium is deemed justifiable given Fortinet's forecast of free cash flow growth at 32%, which surpasses the peer group's average growth rate of 25%.
Fortinet is expected to deliver an in-line performance for the third quarter and is anticipated to reiterate its full-year guidance. The company's consistent growth and market share gains reflect its strong position in the competitive cybersecurity landscape.
Investors and market watchers will be looking forward to Fortinet's upcoming earnings report after the market close on November 7, 2024, to assess the company's financial health and outlook for the end of the year. The updated stock price target suggests confidence in Fortinet's continued performance and growth trajectory in the cybersecurity sector.
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