Fortinet (FTNT) Stock Jumps 4.5%: Will It Continue to Soar?

Fortinet FTNT shares rallied 4.5% in the last trading session to close at $204.23. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 4.9% gain over the past four weeks.

The upswing came after Fortinet reported impressive first-quarter 2021 results and raised the full-year outlook. Fortinet delivered first-quarter non-GAAP earnings per share of 81 cents, beating the Zacks Consensus Estimate of 74 cents. The reported figure also improved significantly from the year-ago quarter’s earnings of 60 cents per share. Moreover, revenues of $710.3 million surpassed the consensus mark of $678.9 million and increased 23% year over year.

Buoyed by the impressive quarterly performance, the company raised its guidance for full-year 2021, creating an optimism among investors.

Notably, strategic investments in developing powerful products and services, efforts to expand into adjacent addressable markets and boost the firm’s global sales force is benefiting the company.

Moreover, an increasing number of people logging into employers' networks is triggering a greater need for security. This trend is spurring demand for Fortinet’s products. Solid demand for the company’s advanced FortiGate technology with SPU, integrated Security Fabric platform and hybrid multi-cloud offerings, is an indicator of this.

Price and Consensus

Price Consensus Chart for FTNT

This network security company is expected to post quarterly earnings of $0.90 per share in its upcoming report, which represents a year-over-year change of +9.8%. Revenues are expected to be $731.07 million, up 18.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Fortinet, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FTNT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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