Fortinet Stock Continues to March Higher
As our lives get more connected and digital, the threats also keep increasing. This is a continuous challenge for the companies responsible for our personal data and communications.
They not only stand to lose business in the case of a data breach, but they also risk their reputation, which is hard to regain. But there are a few players in the cybersecurity field that help such companies protect their critical data (and help their investors make good money).
A case in point is Fortinet Inc (NASDAQ:FTNT). The company is a dominating player across the globe in providing cybersecurity solutions. Its customers include the majority of the Fortune 500 companies, and they come from a diverse set of businesses.
They trust Fortinet to secure their networks against various cyber threats. The company takes care of the security infrastructure of its clients so they can handle the ever-changing and complicated threats to their systems.
The company’s focus areas include its “FortiGate” hardware, “Fortinet Security Fabric,” and “Fortinet Cloud Security,” as well as securing Internet of Things (IoT) and operational technology.
Simply speaking, Fortinet provides top-rated security features and products to ensure that its customers’ data and networks aren’t compromised. The popularity of its products keeps pushing FTNT stock to new heights.
Companies all over are spending millions (or even billions) of dollars to strengthen their defense against various digital threats. This has made the market quite attractive—and poised for higher growth in the coming years.
As per recent research by MarketsandMarkets Research Private Ltd., the cybersecurity market is likely to grow from $152.7 billion in 2018 to $248.3 billion by 2023. This represents a compound annual growth rate (CAGR) of 10.2% during 2018–2023. (Source: “Cybersecurity Market worth $248.26 billion by 2023,” MarketsandMarkets Research Private Ltd., last accessed December 12, 2018.)
MarketsandMarkets says that the major reasons for growth in the cybersecurity market are strict data protection rules and the rise of cyberterrorism.
Fortinet is in a strong position to benefit from this growth. With the increasing adoption of cloud computing and the interconnection of devices with the rise of IoT, the threats to companies are likely to keep growing. This should keep the demand for Fortinet’s products (and the value of Fortinet stock) high.
The company recently announced that DTDC Express Limited has boosted its existing Fortinet Security Fabric deployment, which covers 30 global offices and more than 450 branches in India. DTDC Express is India’s leading distribution and logistics company. (Source: “Fortinet Secures the Global Network of DTDC Express – India’s Second Largest Express Distribution Company,” Fortinet Inc, December 10, 2018.)
On account of improved demand for its products and services, Fortinet has been posting phenomenal financial results for the past few years.
Last month, the cybersecurity company announced strong third-quarter results. Revenue increased by 21% year-over-year to touch $454.0 million, while billings were up by 22% as compared to the third quarter of the previous year.
Ken Xie, the CEO, said the company is gaining market share due to the competitive advantages associated with its unique Security Fabric Platform. In October, the company acquired ZoneFox, which further enhanced this platform. (Source: “Fortinet Reports Third Quarter 2018 Financial Results,” Fortinet Inc, November 1, 2018.)
Improving business has caused FTNT stock to climb high. The stock has gained about 77% over the last year and about 79% since we covered it in Profit Confidential in November 2017.
Chart courtesy of StockCharts.com
Fortinet has a strong position in the cybersecurity space as it protects its clients’ networks, cloud, and e-mails from different types of threats lurking in cyberspace.
The cybersecurity market will likely continue to grow in the coming years because of the increased uncertainty and risks associated with the digital world. Almost every type of business needs protection from cyber threats.
FTNT stock is well positioned to gain from this trend, so investors will likely not want to miss out on this opportunity.