Fortinet stock plunged nearly 15% from its all-time high

Fortinet (FTNT.US) is a cyber security company that has thrived in 2021 thanks to strong demand for its products and services. The company is valued at nearly $55 billion at this point.

Analysts have long expected an upward trend among digital security companies. The number of entities using cybersecurity companies is increasing year over year as digitization plays an increasingly important role in business and data storage. The COVID-19 pandemic has further accelerated the digitization of society and businesses. The shift to remote working and learning environments has created additional strong demand for the services offered by Fortinet. Today, the trend appears to be accelerating further which may indicate a long-term upward trend for companies across the sector.

The data shows that Fortinet has gained an impressive share in niche market sectors such as The data shows that Fortinet has gained impressive market share in niche sectors such as SD-WAN (software-defined wide area network security), which is estimated to see annual growth rates of 20% through 2024, and NGFW (next-generation firewall), for which demand is expected to grow as much as 12% annually in the long term, according to analysts at Mordor Intelligence.

From the beginning of 2021 to the present, the stock value of this emerging technology company has risen more than 100%, easily beating comparable returns from both the NASDAQ and SP500 indexes. In comparison, the S&P 500 index is up 27.02% over the past year, while Fortinet shares have gained 147.52%

Fortinet's deferred revenue rose 30% year-over-year to $3.11 billion in the third quarter, nearly equaling the company's revenue for the twelve-month period of $3.13 billion. Deferred revenue is money collected upfront for services, and its high level may indicate volume and customer engagement that could lead to continued revenue growth. In the most recent quarter, the company had 83 deals worth more than $1 million, up from 48 in the same period last year. The number of deals valued at more than $500,000 also increased by nearly 30% over the volume in the same quarter last year. 

The company is now on track to deliver year-over-year revenue growth of nearly 28%.

With a series of impressive financial results that have consistently beaten Wall Street expectations, the stock is up more than 130% in 2021.  Fortinet started the year at $148.53 and has since climbed to a peak of $366 on December 29, 2021, the average Wall Street analyst rating is currently 'BUY'. In addition to the average Wall Street analyst rating, Fortinet has an average price target of $374. This means that analysts on average expect the stock to gain more than 10% over the next 12 months.

Fortinet stock's hot streak could continue into 2022, with analysts expecting the cybersecurity company's long-term upward momentum not to lose its strength although temporary corrections like the one from yesterday's session on January 3 could happen. Analysts also estimate that Fortinet's revenue and earnings could grow by nearly 18% in 2022.

The beginning of the year is not very good for Fortinet (FTNT.US). The share price has dropped almost 15% from its recent all-time highs. Yesterday stock broke below local support at $ 346.50 while today sellers managed to push the price below 200 SMA (red line). If current sentiment prevails, downward move may accelerate towards support at $ 297.00 which coincides with 23.6% Fibonacci retracement and lower limit of the 1:1 structure. Source: xStation5