FTNT stock falls on weaker than expected earnings outlook for Fortinet stock

Fortinet stock fell on mixed September quarter guidance, although second-quarter earnings, revenue and billings beat analysts’ estimates. The size of the second quarter pace for FTNT stocks disappointed some investors.


Based in Sunnyvale, CA Fortinet (FTNT) released its second quarter results after the market closed on Wednesday. Fortinet shares fell 16% to 52.79 midday in the stock market today.

UBS analyst Roger Boyd said in a report, “Fortinet had another impressive quarter, but fell short of high expectations with beats of 4% in billings, 3% in revenue and around 0% on revenue below the double-digit beats seen in prior quarters.”

Fortinet’s earnings on an adjusted basis were 24 cents per share, up 26% from a year earlier. Additionally, FTNT stock revenue soared 29% to $1.03 billion.

Analysts had expected Fortinet earnings of 22 cents per share on sales of $1.027 billion for the period ending June 30.

The cybersecurity firm said billings, a measure of sales growth, rose 36% to $1.30 billion, from $1.25 billion estimated by analysts.

FTNT stock: Earnings outlook disappoints

For the current quarter ending in September, the company is forecasting earnings of 27 cents at the midpoint of guidance. Fortinet said it expects revenue of $1.12 billion. Analysts had forecast earnings of 27 cents per share on revenue of $1.13 billion.

“Billings and product revenue each increased in the mid-30s on a year-over-year basis and significantly exceeded Street estimates,” Mizuho Securities analyst Gregg Moskowitz said in a statement. “That said, services revenue was surprisingly below consensus due to supply chain and other temporary factors. Guidance was also more mixed than expected, with 2022 billings increased but total revenue only maintained. “

At an investor day for FTNT stock on May 10, Fortinet unveiled financial targets for 2025 that call for billings of $10 billion and revenue of $8 billion, implying an average growth rate over three years by 22% for both measures.

With Thursday’s loss, FTNT stock is down 28% in 2022.

Additionally, Fortinet stock holds a relative strength rating of 83 out of the best possible 99, according to IBD Stock Checkup.

The company competes in the firewall network security market against Palo Alto Networks (PANW), Check Point Software Technologies (CHKP) and others. Firewalls block online intrusions and monitor web applications.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


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