Fortinet Inc (FTNT)

Shares of Fortinet, Inc. (FTNT) dropped by 12.35% from $57.59 to $50.48 in the trading on Friday, November 3, 2023. The reason why FTNT down is due to the release of Fortinet's third-quarter results, which fell short of market expectations.

• Q3 Results Disappoint: Fortinet's third-quarter report, released after the market closed, revealed earnings that exceeded Wall Street's predictions but disappointing sales figures. The company posted non-GAAP earnings per share of $0.41 on revenue of $1.33 billion, while analysts had anticipated earnings of $0.36 per share on sales of $1.35 billion. Although sales had grown by approximately 16% year over year, the results signaled a slowdown in growth, a concern reinforced by management's comments, leading to a negative market sentiment.
• Wall Street's Reaction: Following the Q3 report, Fortinet's stock faced downgrades in ratings and price targets from notable investment firms like Stifel and JPMorgan Chase.
• Uncertain Future for Fortinet: Looking ahead, Fortinet's guidance for the current quarter anticipates sales between $1.38 billion and $1.44 billion, implying roughly 10% year-over-year growth at the midpoint. However, analysts had targeted sales of $1.49 billion for the period. The company's guidance midpoint falls about 5% lower than analysts' expectations, with concerns that sales could even land at the lower end of the forecast range. Notably, Fortinet is grappling with reduced demand for its firewall hardware and services. Consequently, the company plans to increase investments in security operations, its universal secure access service edge, and secure networking offerings. With its core performance driver losing momentum and investments in new growth areas, Fortinet may face pressure on its sales and earnings in the near term.

Fortinet (FTNT) shares plunged 25.07% after reporting mixed Q2 2023 results. While revenue and adjusted net income beat estimates, the company lowered its full-year revenue and billings guidance due to macro-uncertainty. Investors took profits as shares had surged nearly 60% year to date before the report.

https://finance.yahoo.com/m/deeff990-6381-3343-bb97-b9d9a74cbc30/why-fortinet-stock-plunged.html