Updated Aug 17 at 11:37am ET.
Follow Fortinet to never miss an important update.
Fortinet is acquiring Virtue AI to help customers secure their artificial intelligence models. The deal adds agentic AI validation, which is a way of using automated software to constantly test and verify that AI systems are behaving correctly and safely while they are running.
As more companies build their own AI tools, they face new risks like data leaks or the models being manipulated. This acquisition helps Fortinet stay relevant by protecting those specific AI workflows rather than just the network they sit on. It is a small but logical step as the company tries to move beyond its traditional business of selling physical firewall boxes.
Source: GlobeNewsWire
The firm lifted its target price from $115 to $160 while keeping a neutral rating. This change reflects a more optimistic view of the company's value after it reported better-than-expected sales and profits. Even with the higher target, the stock is currently trading slightly above what the firm thinks it is worth.
Source: Susquehanna
The firm kept its rating at sector perform but raised its price target from $160 to $185. This suggests the analysts see more room for the stock to rise following a quarter where the company showed it could grow its hardware sales much faster than many expected.
Source: RBC Capital
Revenue grew 26 percent to about 2.05 billion dollars, well ahead of the 1.89 billion dollars analysts expected. The standout was product revenue, which jumped 52 percent. This is a big deal because it suggests the slowdown in physical security hardware that worried some people last year is over.
Management also raised its full-year sales growth forecast to 19 percent. The company is turning its high sales into plenty of cash, reporting nearly 1 billion dollars in free cash flow for the quarter. This cash gives it a cushion to keep investing in its own specialized chips, which help its security software run faster and more efficiently than rivals.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The new FortiGate 1200G series and FortiSASE Outpost are aimed at the trend of "convergence," where companies want their networking and security to work as one system. These products help customers use cloud-based security even in their own private data centers. This supports the company's goal of moving beyond traditional firewalls into more modern, subscription-based services.
Source: GlobeNewsWire
Analysts issued a flurry of price target increases on July 30 to reflect the company's recent performance. Most analysts are split, with 29 buys against 39 neutral or bearish ratings, and the average target is roughly equal to today's price.
The company has beaten analyst profit targets for eight straight quarters, often by double digits. Management clearly has a habit of under-promising and then over-delivering on their results.
| Expectation | |
|---|---|
| EPS | $0.85 |
| Revenue | $2.06B |
