Fortinet FTNT recently introduced a networking and security solution — Fortinet Secure SD-WAN for Multi-Cloud — to enable application developers and enterprise IT teams to develop a seamless SD-WAN-backed cloud-to-cloud network and security framework.
Per the recent Flexera 2020 State of the Cloud report, 93% of enterprises have moved their operations to a multi-cloud environment. However, they have to work with several cloud providers to address different business requirements including disaster recovery, data backup, application resiliency and global coverage.
The solution primarily addresses challenges related to performance, visibility, cost and control that come with multi-cloud environments.
Fortinet, Inc. Price and Consensus
Fortinet, Inc. price-consensus-chart | Fortinet, Inc. Quote
Growing Adoption of Secure SD-WAN Bodes Well
Growing adoption of its SD-WAN solutions is proving to be a key growth driver, even in a year as challenging as 2020. Moreover, the market research firm, MarketsandMarkets, predicts that the market size for SD-WAN solutions could grow to $4.1 billion by 2023 from $1 billion in 2018, indicating a CAGR of 32.7%. As there are only a few vendors that offer both security and SD-WAN solutions, Fortinet is well positioned to capitalize on the increasing opportunities in the market.
With applications rapidly moving to the cloud and the rise of the remote working trend, numerous IoT devices are added to the network, positioning the SD-WAN market for tremendous growth. Per 650 Group, as mentioned by Hewlett Packard HPE, the market for SD-WAN is likely to grow from $2.3 billion in 2020 to $4.9 billion in 2024, witnessing a CAGR of about 20.5%.
This spurt of transformation is quickly diminishing the relevance of traditional WAN architectures, prompting enterprises to invest in SD-WAN technology to secure and scale connections from their network edge to on-premises and cloud-based endpoints at a lower cost.
Fortinet Secure SD-WAN for Multi-Cloud is designed to ensure security and high-performance connectivity among public cloud workloads running on multiple clouds cost-efficiently.
Notably, in the first quarter of 2020, the company’s product revenues increased 18.2% year over year to $192.3 million. Notably, this growth was driven by the continued adoption of the FortiGate-based secure SD-WAN solution.
Fortinet’s SD-WAN business began the year with the announcement that Burger King Brazil, head franchisee of the Burger King and Popeyes Louisiana Kitchen restaurants, adopted this solution to acquire high-performance networking capabilities to simplify operations and strengthen security across corporate and restaurant locations.
Moreover, in May, it announced that consumer and commercial services company, Rollins Inc., selected Fortinet Secure SD-WAN to reduce network outages and improve user experience and application performance. Additionally, its Secure SD-WAN and SD-Branch solutions were chosen by the Nippon Telegraph and Telephone West Corporation to enhance the "FLET’S SDx" subscription service.
Last month, Fortinet’s Secure Software-Defined Wide Area Network (SD-WAN) was adopted by New Zealand-based telecommunications and digital services company, Spark NZ, to improve application experience and automate network security operations cost-efficiently. The news of the collaboration with Spark NZ came days after Fortinet announced that it is witnessing continued momentum with network service providers who are leveraging its Secure SD-WAN. These partners include Alestra, FluidOne and Hydro One Telecom.
Zacks Rank & Other Key Picks
Fortinet currently sports a Zacks Rank #1 (Strong Buy).
A few other similar-ranked stocks are Asure Software ASUR and Baozun BZUN. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Asure Software and Baozun is currently pegged at 14% and 29%, respectively.
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