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Fortinet Inc. Message Board

  • hageneriksson hageneriksson Jan 29, 2014 6:56 PM Flag

    ugly operating margin guidance yoy and full year FY15

    some analysts seem outright puzzled on the call about the disappointing operating margin guidance (just 12% in Q1 and just 17% for the full FY). Revenue target at "twice the market growth rate" seems also to fall short on at least some more optimistic estimates. So eps estimates for the year clearly will have to come down which is disappointing to say the very least.

    Not giving guidance for the full year doesn't help things either and the very muted new CFO performance on the call makes on wonder when the next guy for this job might arrive.

    Bottom line:

    Great Q4 but obviously more of a budget flush and a generally improving market then a function of the company's own outperformance - otherwise they wouldn't have to invest that heavily to make good for former "underinvestment into growth". All in all a very disappointing outlook given that the company has been talked up as "the next big thing". Would short the shares as the stock is still up 4% in after hours. Would expect very cautious analyst commentary (at least from the Robert W. Baird guy) and perhaps some downgrades.

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