Fortinet (NASDAQ:FTNT) Shares Gap Down on Analyst Downgrade

Key Points

• Fortinet shares fell sharply after Wedbush downgraded their price target from $120 to $100, opening at $74.30 from a previous close of $96.58.
• Multiple analysts have revised their ratings with Scotiabank lowering theirs to $115 and a mix of other ratings from neutral to hold, leading to an average target price of $103.03.
• Despite recent downgrades, Fortinet reported $1.63 billion in quarterly revenue, surpassing expectations, and a 30.60% net margin, indicating strong financial performance.

Fortinet, Inc. (NASDAQ:FTNT - Get Free Report) shares gapped down before the market opened on Thursday after Wall Street Zen downgraded the stock from a buy rating to a hold rating. The stock had previously closed at $96.58, but opened at $74.30. Fortinet shares last traded at $72.31, with a volume of 14,887,574 shares trading hands.

Other equities research analysts have also recently issued reports about the stock. Wells Fargo & Company cut their price objective on shares of Fortinet from $110.00 to $85.00 and set an "equal weight" rating on the stock in a research note on Thursday. Cowen cut shares of Fortinet from a "buy" rating to a "hold" rating in a research note on Thursday. Wedbush cut their price objective on shares of Fortinet from $120.00 to $100.00 and set an "outperform" rating on the stock in a research note on Thursday. KeyCorp cut shares of Fortinet from an "overweight" rating to a "sector weight" rating in a research note on Thursday. Finally, Wolfe Research started coverage on shares of Fortinet in a research report on Monday, May 12th. They issued a "peer perform" rating on the stock. Two research analysts have rated the stock with a sell rating, twenty-five have issued a hold rating, eight have given a buy rating and two have assigned a strong buy rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus target price of $97.93.

Insider Activity at Fortinet

In related news, Director William H. Neukom purchased 335 shares of the stock in a transaction on Friday, June 6th. The shares were purchased at an average price of $104.22 per share, with a total value of $34,913.70. Following the transaction, the director directly owned 301,471 shares of the company's stock, valued at $31,419,307.62. This trade represents a 0.11% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, CEO Ken Xie sold 158,486 shares of the business's stock in a transaction that occurred on Monday, August 4th. The stock was sold at an average price of $98.48, for a total value of $15,607,701.28. Following the transaction, the chief executive officer directly owned 51,391,879 shares in the company, valued at $5,061,072,243.92. This trade represents a 0.31% decrease in their position. The disclosure for this sale can be found here. 18.00% of the stock is owned by insiders.

Institutional Trading of Fortinet

Institutional investors have recently added to or reduced their stakes in the company. Frank Rimerman Advisors LLC lifted its position in shares of Fortinet by 10.6% during the 2nd quarter. Frank Rimerman Advisors LLC now owns 14,811 shares of the software maker's stock valued at $1,566,000 after acquiring an additional 1,423 shares during the period. LSV Asset Management bought a new stake in shares of Fortinet during the 2nd quarter valued at about $25,000. Dorsey & Whitney Trust CO LLC boosted its holdings in Fortinet by 7.1% in the second quarter. Dorsey & Whitney Trust CO LLC now owns 7,411 shares of the software maker's stock worth $783,000 after acquiring an additional 493 shares in the last quarter. Raiffeisen Bank International AG lifted its holdings in shares of Fortinet by 40.0% in the second quarter. Raiffeisen Bank International AG now owns 84,290 shares of the software maker's stock valued at $8,740,000 after purchasing an additional 24,069 shares in the last quarter. Finally, Symphony Financial Ltd. Co. bought a new position in shares of Fortinet in the second quarter valued at approximately $16,902,000. 83.71% of the stock is currently owned by institutional investors.

Fortinet Stock Up 0.4%

The firm has a market capitalization of $57.17 billion, a P/E ratio of 29.79, a price-to-earnings-growth ratio of 2.50 and a beta of 1.07. The stock has a fifty day moving average of $101.76 and a 200 day moving average of $101.65. The company has a debt-to-equity ratio of 0.24, a current ratio of 1.33 and a quick ratio of 1.24.

Fortinet (NASDAQ:FTNT - Get Free Report) last posted its earnings results on Wednesday, August 6th. The software maker reported $0.64 EPS for the quarter, topping the consensus estimate of $0.59 by $0.05. Fortinet had a return on equity of 111.46% and a net margin of 30.60%. The business had revenue of $1.63 billion during the quarter, compared to analysts' expectations of $1.63 billion. During the same period in the previous year, the business earned $0.57 earnings per share. The firm's revenue was up 13.6% on a year-over-year basis. On average, research analysts anticipate that Fortinet, Inc. will post 2.09 EPS for the current fiscal year.

Fortinet Company Profile

Fortinet, Inc provides cybersecurity and convergence of networking and security solutions worldwide. It offers secure networking solutions focus on the convergence of networking and security; network firewall solutions that consist of FortiGate data centers, hyperscale, and distributed firewalls, as well as encrypted applications; wireless LAN solutions; and secure connectivity solutions, including FortiSwitch secure ethernet switches, FortiAP wireless local area network access points, FortiExtender 5G connectivity gateways, and other products.