Fortinet Inc (NASDAQ: FTNT) seems poised to generate over 15% top line growth through 2023, backed by a healthy security market, emerging differentiation around the company’s SD-WAN technology and its go-to-market strategy, according to Morgan Stanley.
Morgan Stanley’s Melissa Franchi maintained an Equal-Weight rating on Fortinet while raising the price target from $82 to $96.
Management maintained a positive tone at Fortinet’s Analyst Day and gave confidence in the company being positioned for sustainable mid-teens growth through 2023, Franchi said in the note.
Management commentary suggested “emerging use cases for network security, improving product positioning with the upcoming release of a new chipset and a more targeted sales motion enabling inroads into the enterprise space,” Franchi wrote.
While the market seems to be excited about Fortinet's SD-WAN capability, it is difficult to quantify the impact, since this technology is included in FortiGate appliances for free, the analyst explained.
She added, however, that Fortinet appears “well positioned to be a leader in the SD-WAN space,” despite the emerging competition.
Management reaffirmed the projection of over 15% billings growth through 2023, which is higher than the current consensus expectations.
Maintaining the Neutral rating, Franchi wrote, “Greater visibility into the magnitude of SD-WAN as a driver and the trajectory of FCF margins would get us more constructive.”
Shares of Fortinet were up 0.82% at $104.71 at the time of publishing on Tuesday.