On Friday, Piper Sandler adjusted its outlook on Fortinet shares (NASDAQ:FTNT), reducing the price target to $70 from $75, while keeping a Neutral rating on the stock. The adjustment follows Fortinet's first-quarter financial results, which presented a mix of strong revenue and margins but were counterbalanced by a modest shortfall in billings and a lower billings forecast for the second quarter.
The firm noted that Fortinet is gaining traction with its Secure Access Service Edge (SASE) offering, as evidenced by the increase in its mix to 24% and a year-over-year pipeline growth of 45%. This includes a significant 150% growth in the Secure Service Edge (SSE (LON:SSE)) pipeline. The company's strategic emphasis on expanding beyond secure networking is reflected in these figures.
Despite the reduced billings outlook for the second quarter, Fortinet's management has reiterated the full-year billings guidance. Piper Sandler highlighted the importance of a potential recovery in billings during the second half of the year, given the prospect of easier comparisons and improving market trends.
The report concluded that the revised $70 price target reflects a lower terminal multiple. Piper Sandler's stance remains neutral, taking into account the current market dynamics and the company's financial performance indicators.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.