It might have been some of the worst news that Fortinet (NASDAQ:FTNT) investors could have heard. The cybersecurity stock lost over 23% of its value in Thursday afternoon’s trading, and it’s largely traced back to a cut in guidance that had investors cashing out and sprinting for the door.
Fortinet spelled out the extent of the losses, lowering its full year forecast from the original figure of between $5.43 billion and $5.49 billion to a somewhat more modest figure of between $5.35 billion and $5.45 billion. It’s not a total catastrophe, and if everything works out it will still fall in the original range, making all this a tempest in a teapot. But it’s more likely that a loss will emerge, and the reasons why are about what you’d expect. Businesses, sensing recession and likely economic trouble ahead, are pulling back on expenses, and that includes things like updating cybersecurity systems that may have only been updated recently.
For its part, though, Fortinet is working to step up its product line and hopefully ameliorate some of those losses. It’s got new features ready for its software-defined wide-area networking (SD-WAN) customers, including better monitoring systems like a network underlay as well as new overlay tools. It’s also bringing out a new line of next-generation firewall systems that look to offer vastly improved performance. While it might not be enough to get everybody back on board, it will likely get some back, and that means fewer losses for Fortinet.
Analysts, however, are unfazed. As far as they’re concerned, Fortinet stock is a Strong Buy, supported by 17 Buy ratings and five Hold. Further, with an average price target of $78.71, Fortinet stock offers investors a 35.29% upside potential.
