Fortinet (FTNT) to Report Q2 Earnings: What's in the Offing?
Fortinet FTNT is scheduled to report second-quarter 2023 results after market close on Aug 3.
The cybersecurity firm projects revenues between $1.28 billion and $1.32 billion. The Zacks Consensus Estimate for the same is pegged at $1.30 billion, suggesting year-over-year growth of 26.4%.
The company forecasts second-quarter non-GAAP earnings in the range of 33-35 cents per share. The consensus mark is pinned at 34 cents per share, implying growth of 41.7% from the year-ago figure of 24 cents.
Fortinet’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.4%.
Fortinet, Inc. Price and EPS Surprise
Fortinet, Inc. price-eps-surprise | Fortinet, Inc. Quote
Factors to Consider
For the April-June quarter, Fortinet anticipates billings in the band of $1.56-$1.60 billion. The heightened demand for its security and networking products amid the post-pandemic reality of remote working and the accelerated emergence of digital technologies might have benefited the to-be-reported quarter’s performance. Our model estimates for Billings in the second quarter are pegged at $1.57 billion, suggesting year-over-year growth of 20.4%.
The rapid adoption of FortiGate-based secure Software-Defined Wide Area Network (SD-WAN) offerings is likely to have supported FTNT’s Product segment. Our model estimates for Product revenues in the June-end quarter are pegged at $479.7 million, suggesting year-over-year growth of 19.7%.
FortiGuard security subscriptions and FortiCare technical support services are likely to have gained solid traction, favoring the company’s Services segment. Our model estimates for quarterly Services revenues are pegged at $804.2 million, indicating a year-over-year improvement of 27.8%.
Fortinet’s second-quarter performance is likely to have gained from higher global cybersecurity spending. The growing adoption of SD-WAN solutions might have acted as a tailwind. Per MarketsandMarkets, the market size for SD-WAN solutions is likely to reach $13.7 billion by 2027 from $3.4 billion in 2022, witnessing a CAGR of 31.9%.
As one of the broadest security service providers globally, Fortinet’s FortiTrust, a unified solution with a single user-based licensing model for flexible consumption across networks, endpoints and clouds, has been witnessing solid traction. This might have driven the company’s private and public cloud billings.
However, softness in overall IT spending is likely to negatively impact FTNT’s second-quarter results. Organizations are pushing back their big and expensive IT investments amid growing recessionary concerns.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Fortinet this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Although FTNT sports a Zacks Rank #1 at present, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Per our model, Twilio TWLO, Celsius CELH and Inter Parfums IPAR have the right combination of elements to post an earnings beat in upcoming releases.
Twilio has an Earnings ESP of +6.90% and carries a Zacks Rank #2 at present. The company is scheduled to report second-quarter 2023 results on Aug 8. TWLO’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 138.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TWLO’s quarterly earnings is pegged at 29 cents per share, suggesting a year-over-year increase of 363.6%. Its quarterly revenues are estimated to increase 4.4% year over year to $984.5 million.
Currently, Celsius has an Earnings ESP of +50.64% and carries a Zacks Rank #2. The company is likely to report its second-quarter 2023 results on Aug 8. CELH’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once and delivering an average negative earnings surprise of 99%.
The Zacks Consensus Estimate for CELH’s second-quarter earnings is pegged at 31 cents per share, implying a year-over-year surge of 158.3%. The company is estimated to report revenues of $278.9 million, which suggests a surge of 81.1% from the year-ago quarter.
Inter Parfums has an Earnings ESP of +11.74% and a Zacks Rank #1 at present. The company is expected to report its second-quarter 2023 results on Aug 8. IPAR’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the average surprise being 37.2%.
The Zacks Consensus Estimate for Inter Parfums’ second-quarter earnings is pegged at 88 cents per share, indicating a 2.3% increase from the year-ago quarter’s earnings of 86 cents. The consensus mark for revenues is pegged at $309.1 million, suggesting a year-over-year increase of 26.3%.
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Fortinet, Inc. (FTNT) : Free Stock Analysis Report
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