Fortinet Should 'Ignore Quarterly Noise Of Backlog Trends,' Bullish Analyst Says

Shares of Fortinet Inc (NASDAQ: FTNT) climbed during the premarket session on Monday, after the company reported better-than-expected first-quarter results.

The premium at which the stock trades to its cyber peers is warranted, given the company’s strong fundamentals, according to BofA Securities.

The Fortinet Analyst: Tal Liani upgraded the rating for Fortinet from Neutral to Buy, while raising the price target from $66 to $75.

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The Fortinet Thesis: The company has continued with its strong execution, despite macro challenges, Liani said in the upgrade note.

“In 1Q revenues grew 30% YoY, orders grew double digits with strong new logo additions, and 30% service revenue growth, driven by SaaS and pay-as-you solutions and 35% Fortiguard growth,” the analyst wrote.

Pricing action contributed to the company’s gross margin expansion to 76.3%.

“We believe that in the current uncertain environment, it is more prudent for investors to focus on the basic value proposition of Fortinet and ignore the quarterly noise of backlog trends,” Liani added.

FTNT Price Action: Shares of Fortinet had risen by 3.47% to $66.83 in premarket trading on Monday.