William Blair analyst Jonathan Ho has maintained their neutral stance on FTNT stock, giving a Hold rating today.
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Jonathan Ho has given his Hold rating due to a combination of factors impacting Fortinet’s performance. Although the company exceeded expectations in terms of billings and revenue for the third quarter, there was a noticeable slowdown in services revenue and guidance for the fourth quarter. This was attributed to a mismatch between the strong growth in product revenue and the associated services, as larger customers are purchasing products with future service true-ups expected.
Another factor influencing the Hold rating is the decline in Fortinet’s CNAPP portfolio following the Lacework acquisition, alongside the limited contribution from the firewall refresh opportunity. Despite these challenges, Fortinet’s SASE and other platform businesses showed promise, with potential upsell opportunities from a large customer base and new network processor releases. The company anticipates long-term growth of 10% to 15% as it continues to capture market share with its hardware ASIC. However, the current uncertainties and timing issues warrant a cautious approach, leading to the Hold recommendation.
In another report released today, TD Cowen also maintained a Hold rating on the stock with a $100.00 price target.