Stifel’s Adam Borg sees a 19% upside in Fortinet stock

Fortinet Inc (NASDAQ: FTNT) stock has more than doubled this year already, but Stifel says “there’s a lot of life left at this party”.

Stifel assumes coverage of Fortinet with a buy rating

On Tuesday, Stifel’s Adam Borg assumed coverage of the cybersecurity company with a ‘buy’ rating and a price target of $355 that represents a further 19% upside from here.

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The analyst expects Fortinet to see an over 15% annualised growth in sales that “warrants the current high valuation”. Its ASIC chips threaten competitors like Argus as they offer strong performance at up to 40% lower prices. Borg also wrote:

Fortinet’s cloud portfolio is relatively less mature than competitors but Fortinet has historically not been a first mover, but a relatively fast follower as it prioritizes internally-built, high-quality, and highly-integrated products (which have advantages over competitors with fragmented/non-integrated offerings).

The $49 billion company now has a price to earnings ratio of 96.64.

Hightower’s Link agrees with Stifel’s bullish call

On CNBC’s “Halftime Report”, Hightower’s Stephanie Link, who also owns the stock, agreed to the bullish call, dubbing Fortinet a “market share growth story”.

It’s a market share growth story. They’ve got new products, they have price and performance advantage, and they are winning in enterprise, which is key.

Link also disclosed that she has trimmed her position in FTNT on exponential growth this year. She, however, still remains “overweight” on the stock.

In its latest reported quarter, Fortinet said billings and product growth were up 35% and 41%, respectively, which Link said gave her “visibility” that the California-based firm will expand its market share in the future.

Fortinet’s total addressable market is currently worth about $800 billion.