UPDATE: Nomura Reiterates Buy Rating, Lowers PT on Fortinet Following Q1 Results

In a report published Wednesday, Nomura analyst Rick Sherlund reiterated a Buy rating on Fortinet FTNT, but slightly lowered the price target from $23.00 to $22.00. In the report, Sherlund noted, “Q1 results were consistent with the negative preannouncement. The new CFO has lowered guidance to (hopefully) de-risk the stock in a slow macro environment. The slowdown in product license revenue growth to about 9% in Q1 is a dramatic deceleration over the past 2 years and likely reflects the slowing macro environment and a notable shift away from large deals, particularly among the telecom service provider market. The new CFO/COO is a welcomed addition to management and wasted no time in cutting guidance, having been on the job for only 1 week. Shares are not cheap but this is a strategic market and the company delivers quality, high performance UTM products. We maintain our Buy rating, but lower PT to $22 from $23 on slower growth assumption. The shares trade at 28.5X calendar 2013 EPS (ex-cash and investments of $4.66 per share) and 14.8x EV/uFCF.” Fortinet closed on Tuesday at $17.96.