Fortinet stock popped nearly 11% on Nov. 1 alone -- the first trading day after the company's quarterly update hit the wires.
Fortinet's results were indeed impressive: Quarterly revenue climbed 21% year over to $547.5 million, translating to adjusted net income of $116.9 million, or $0.67 per share. Most analysts were modeling lower earnings of $0.56 per share on revenue closer to $533 million. Billings -- a key metric to help gauge future growth -- also climbed 19% to $626.6 million, well above Fortinet's own guidance for a range of $600 million to $615 million.
Chairman and CEO Ken Xie credited the strength of the Fortinet Security Fabric, cloud, and SD-WAN products, noting that the company's 21% top-line growth outpaced that of the broader cybersecurity industry.
"As we approach the tenth anniversary of Fortinet's initial public offering on November 18, we are focused on driving better than industry average growth for at least the next decade," Xie added.
In the meantime, for its current fourth quarter, Fortinet sees revenue ranging from $595 million to $610 million -- or roughly 19% growth at the midpoint -- with billings of $750 million to $765 million and adjusted earnings of $0.69 to $0.71 per share.
As a result, Fortinet raised its full-year outlook for the second time in as many quarters to call for 2019 revenue of $2.135 billion to $2.150 billion (up from $2.10 billion to $2.12 billion before), billings of $2.55 billion to $2.565 billion (up from $2.51 billion to $2.54 billion previously), and adjusted earnings per share of $2.39 to $2.41 (up from its old target range of $2.23 to $2.26).
In the end, this beat-and-raise performance was exactly what bullish investors needed to see to drive Fortinet to a fresh all-time high. And barring a broader market pullback that drags other high-flying growth stocks down along with it, I suspect it should have little trouble sustaining this positive momentum going forward.