Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of enterprise infrastructure security company Fortinet
So what: Fortinet saw growth across the majority of its business segments which led it to beat Wall Street's profit expectations by $0.02 ($0.14 vs. $0.12) and to glide past sales expectations ($120.9 million vs. $116.5 million). These weren't small moves either -- sales popped 29% while profits jumped 27%. These figures also surpassed Fortinet's own guidance of $0.12 and revenue range of $114 million-$116 million that it had given in October.
Now what: There is no such thing as a "safe" area in the technology sector, but I've always believed enterprise infrastructure security could be considered one of the closest things to it. Fortinet has a cash-heavy balance sheet and is growing at a breakneck pace -- I just wish the valuation was more compelling. Despite four consecutive double-digit earnings beats, I just can't recommend buying into a company valued at 50 times forward earnings. I would, however, highly recommend adding Fortinet to your watchlist just in case it drops and its valuation does become more compelling.
Craving more input? Start by adding Fortinet to your free and personalized watchlist so you can keep track of the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.