Fortinet Post Strong Quarter; Shares Rise

Fortinet Inc.

reported strong 3Q results beating street expectations across the board. This reinforces Deutsche Bank's conviction that Fortinet is well positioned to benefit from pent up demand for an integrated security solution and strength of proprietary UTM technology. Demand appeared particularly strong in enterprise driven by both greenfield operations and competitive displacements of incumbent large vendors. Overall, it was an excellent quarter highlighting Fortinet's strong position in the high growth UTM space. Fortinet continues to move along a high organic growth trajectory. The recent enterprise deal wins against larger competitors including Cisco, Juniper and Check Point highlight its metamorphosis from an SMB focused vendor to a growing enterprise player. The company announced its largest ever deal with a Fortune 500 US food company. It also highlighted other large deals including two in the financial and one in telecom vertical globally. It cited strong traction for its new products including FortiWiFi and FortiMail. We believe that leadership position in UTM and proprietary ASIC technology primes the pump for strong organic growth. Deutsche Bank has a Buy rating and a $32 PT on FTNT FTNT closed Thursday at $24.70