Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Shares of Fortinet Jumped Today

By Timothy Green - Nov 1, 2019 at 12:55PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cybersecurity company put up strong numbers and raised its guidance.

What happened

Shares of Fortinet ( FTNT 1.20% ) rose on Friday after the cybersecurity provider reported its third-quarter results. It beat analyst estimates for both revenue and earnings, and increased its guidance for the full year. The stock was up 11% at 12:10 p.m. EDT today.

So what

Third-quarter revenue was $547.5 million, up 21% year over year and nearly $14 million higher than the average analyst estimate. Product revenue was $197.1 million, up 20% from the prior-year period, while service revenue jumped 21% to $350.4 million.

A rising chart.

Image source: Getty Images.

"Strong revenue growth for Fortinet Security Fabric, cloud and SD-WAN offerings contributed to our 21% year-over-year total revenue growth in the third quarter, which we believe is stronger than the average revenue growth rate in our industry," CEO Ken Xie said in prepared remarks included in the earnings release.

Non-GAAP (adjusted) earnings per share came in at $0.67, up from $0.49 in the prior-year period and $0.11 better than analysts were expecting.

Now what

For the fourth quarter, Fortinet expects revenue between $595 million and $610 million, along with a non-GAAP operating margin between 25.5% and 26%.

For the full year, the company boosted its guidance ranges. Revenue is now expected between $2.135 billion and $2.150 billion, up from a previous range of $2.10 billion to $2.12 billion. Non-GAAP operating margin is expected between 24% and 25.5%, up from a previous range of 23% to 23.5%.

Fortinet's strong results and guidance prompted analysts at BMO, Mizuho, and Cowen to tack on a few dollars to their respective price targets. Investors seemed to agree with that sentiment, sending the stock higher on Friday.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Fortinet, Inc. Stock Quote
Fortinet, Inc.
FTNT
$308.91 (1.20%) $3.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
635%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.