Fortinet Inc emerged triumphant in the first quarter by surpassing market expectations for both earnings and revenue, fueling a surge of over 5% in its share price on Friday.
In the Q1 report, the cybersecurity giant unveiled an earnings per share (EPS) of $0.34, outperforming analysts’ estimates of $0.29. Furthermore, the company generated a revenue of $1.26 billion during the quarter, exceeding the consensus estimate of $1.2 billion.
As of the time of writing, FTNT (NASDAQ:FTNT) is trading at $64.75 per share, contributing to its remarkable growth throughout the year.
Fortinet’s product revenue experienced a significant upswing of 35% year over year, amounting to $500.7 million. Similarly, its service revenue reached $761.6 million, showcasing a remarkable 30% year-over-year increase.
Ken Xie, the Founder, Chairman, and Chief Executive Officer of FTNT, expressed his satisfaction with the first-quarter results, stating, “Revenue growth in the first quarter was 32% due to strong growth in both product and service revenue. With 35% product revenue growth, we continue to gain market share while being a leading product revenue company in the cybersecurity industry.”
Following the release of the earnings report, Morgan Stanley (NYSE:MS) hailed it as a “picture-perfect start to the year” for Fortinet.
In a note, Morgan Stanley highlighted, “FTNT delivered another strong topline beat with billings +30% YoY. Increased demand for consolidation with security + networking budgets should enable durable growth.” The firm bestowed an Overweight rating on the stock and set a $77 price target.
UBS, which holds a Neutral rating on the stock with a $70 price target, deemed it a decent quarter with minimal macroeconomic challenges.
“Citing conservatism and room for discounting, management left the full-year margin guide intact. Net, while 1Q was better than expected, the 2H setup still doesn’t seem all that conservative, with the 21% billings guide and backlog commentary suggesting very little bookings growth deceleration throughout the year. We continue to view shares appropriately valued for teens billings growth and modest FCF margin expansion in CY24,” commented UBS.
The outstanding performance of Fortinet in the first quarter showcases its resilience and dominance in the cybersecurity industry. With consistent growth and market share expansion, the company is poised for a promising future. Investors and analysts alike are keeping a close eye on FTNT, anticipating continued success and sustainable growth in the coming quarters.
