Fortinet is Blowing Up, But What Does the Street Think?

Fortinet Inc FTNT is gaining huge, roughly 11 percent, in the premarket following a blockbuster earnings report yesterday afternoon. The "magnitude" of the company's billings "was greater than anticipated," according to analysts at Cowen and Company. However, with the premarket move, those same analysts believe that Fortinet is fully valued – placing a $37 price target on the stock, up from $32.

FBR & Co. defined the results as "rock solid" and noted that there was "major strength from the enterprise." Over the next 12 to 18 months, FBR said that Fortinet was in an "enviable position" given its product line, which will give management the opportunity to "show healthy top-line growth and expanding margins." The analysts raised their price target by $5 to $44 based on Fortinet's "growth rate, profitability, and peer valuations."

Morgan Stanley analysts come down on the more cautious side of earnings, upping their $33 price target by just $1 to $34. Morgan Stanley attributed the growth to Fortinet's investments. The analysts said that investors should wait for the upside to translate to cash flows in order to "see significant multiple expansion."

Oppenheimer said that Fortinet's valuation was "attractive," particularly when accounting for its 22 percent revenue growth rate. The company, Oppenheimer said, is "back on a strong growth mode," though they warned that "higher investments" were needed to sustain revenue acceleration. The analysts raised its revenue estimates and reiterated its Outperform rating and $39 price target.