Fortinet Stock: Bear vs. Bull
Fortinet (NASDAQ: FTNT) is among the top names in the cybersecurity industry -- both in terms of size and tech know-how and also in investment returns. The company has managed a fast and steady growth rate for many years, and is a superb example of a technology company allocating resources to the right projects at the right time. With a new digital era on the rise, Fortinet could have plenty of growth left in the tank.
This isn't a perfect stock, though, especially considering the fast-moving nature of the cybersecurity industry it operates in. Here are the bear and bull cases on Fortinet that investors need to know about.
Any bear case against high-growth stocks these days tends to start with valuation, and Fortinet is no exception. Shares currently trade for 41 times trailing 12-month free cash flow. That's a premium price tag, especially for a company like this that derives nearly 40% of its revenue from product sales. Hardware sales are cyclical, and a current upgrade cycle in data centers and enterprise computing products (which pushed Fortinet's product revenue to 54% year-over-year growth in Q1 2022) won't last forever.
Source Fool.com
