Morningstar | FTNT Updated Forecasts and Estimates from 09 Jan 2019
Fortinet popularized the unified threat management, or UTM, device, which combines several network security solutions into a single, affordable product for small or midsize businesses, SMBs. Fortinet is a leader in this space, and we think the company has a compelling offering based on both performance and price. Recently, Fortinet has begun to move up the value chain to target the enterprise market with firewall, sandboxing, and cloud products, a market where we see less churn and better cross-sell opportunities. The firm has had success growing its enterprise customer count, although we calculate that enterprise revenue as a percent of total revenue has flatlined. While we expect continued global breaches will serve as a tailwind for growth, longer term, we believe there are some peripheral risks for this business, underscoring our view that the firm lacks a moat.Fortinet reports revenue in two segments, products and subscription. Products is composed of the flagship FortiGate device, which is offered as both a hardware appliance and virtualized software product, as well as a Sandbox and SIEM device, among others. Services is composed of a growing slate of subscription services tools for those FortiGate products. Fortinet labels these subscription products as “Fabric†and these include email security and endpoint. We expect the higher gross margin services component to outpace the products segment over time.Fortinet has a trio of headwinds effecting the business. First, while Fortinet has certainly grown its enterprise footprint, it still has a reputation as an SMB vendor. Second, the UTM market is increasingly competing with cloud-deployed secure web gateway, or SWG, products. This is compounded by the risk that infrastructure-as-a-service vendors compete more directly in security by offering native security solutions. Third, Fortinet is respected by its hardware prowess, specifically in its ability to create integrated application-specific integrated circuits, unlike some of the firm’s competitors. Nevertheless, this expertise may become less relevant as network firewalls move from hardware appliances to virtualized offerings.Fortinet provides cybersecurity solutions. The company's product offerings consist of its FortiGate product family and its non-FortiGate products. The company's FortiGate hardware and software licenses are sold with a set of security services. These security services are enabled by FortiGuard, which provides threat research and artificial intelligence capabilities from a global cloud network to deliver protection services to each FortiGate appliance. The company's non-FortiGate products include the Fortinet Security Fabric (such as FortiAP, FortiAnalyzer, FortiSwitch and FortiManager), certain cloud security products (such as virtual machines and cloud services) and other products.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.