Fortinet Inc (NASDAQ:FTNT) was launched by two brothers at the turn of the 21st Century. FTNT stock could be considered one of the first cybersecurity stocks.
You may or may not recall that there was a huge doomsday tech movement built around ‘Y2k’, the moment we switched from 1999 to 2000. Fears were stoked that computers’ hardware and software weren’t ready for the transition and it was widely expected that not only would corporate and individual computers fail, but servers would also seize up downing electrical grids and cities’ traffic management systems.
People were stockpiling firewood and buying generators and freeze-dried food. It was a bit nuts.
As you’re likely aware, for all the hand wringing nothing came of the impending Armageddon. Any issues that arose were solved with a quick programming patch or two.
But it symbolized how quickly people had embraced computers yet how unfamiliar they were with them and how they operated. Initially black hat hackers were looking to infiltrate big corporate systems, since they were the one that had plenty of juicy information on individuals as well as their own internal information.
FTNT Stock Emerges From the Y2K Panic
Cybersecurity was a relatively young market then and FTNT stock was just another small player in a sea of players. But FTNT management had the software as well as the management savvy to grow.
FTNT raised $13 million in private funding from 2000-2003. But by the end of 2004, Fortinet had secured $93 million in funding and over 2002 and 2003, FTNT grew its revenue tenfold. By 2004, it had offices in the U.S., Europe and Asia.
After FTNT stock went public in 2009, has been growing its business organically as well as by shrewd acquisitions. Now FTNT trades with a $15 billion market cap, which puts its valuation up with other big cybersecurity firms.
And at that size, Fortinet is still nimble and able to seize new opportunities quickly. But it’s also big enough that it can land big clients and service them regardless of how far flung their operations are.
While FTNT is trading at a rich P/E of 183, it has also rallied 148% in the past 12 months. What’s more, its Q2 numbers were released in early August and came it better than analysts expected and the company guided higher through the end of the year.
Deals greater than $1 million were up 20% compared to the same quarter last year and net income more than doubled. Piper Jaffray still holds an ‘overweight’ on FTNT.
Bottom Line for FTNT Stock
With the cloud, Big Data, smart devices and artificial intelligence expanding into every aspect of daily life, there’s little doubt that cybersecurity will remain a crucial aspect of all our lives.
The innocence of Y2k is gone but the opportunities in cybersecurity are just beginning anew.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
