The Price of Fortinet's Stock Is Rising Again

 The Price of Fortinet's Stock Is Rising Again

Investor interest in the network security firm has increased after several days of losses following the release of its most recent financial report.

Following three days of stock price drops after its most recent quarterly financial report disappointed analysts as well as investors, Fortinet's shares are rising on Wednesday.

The price of Fortinet's shares (ticker: FTNT) is up 2.7% as of this writing on Wednesday morning, at $50.85.

The network security vendor's share value has been declining every day since the business delivered a less positive-than-expected financial report last Thursday, until the turnaround.

As of this writing, the price of Fortinet's stock is 11.7 percent less than its Thursday closing price of $57.59.

The reason for the surge in Fortinet's stock price was not immediately apparent, but investors were also buying shares in other significant cybersecurity companies on Wednesday morning. As of this writing, Palo Alto Networks, a major competitor of Fortinet that saw its stock price decline after the vendor's report last week, was up 0.6 percent to $243.55, while Zscaler's company price was up 1.6 percent to $174.11 per share.

Fortinet's third-quarter results, which concluded on September 30, were released on Thursday. The company's total revenue increased by 16 percent over the previous year. Nevertheless, Fortinet also saw a decline in firewall sales, which caused the company's revenue for the third quarter to below analyst consensus expectations.

Fortinet had its first year-over-year dip in firewall sales since going public in 2009 when its product revenue for the third quarter fell by 0.6 percent to $465.9 million. During Fortinet's quarterly call with investors on Thursday, co-founder, chairman, including CEO Ken Xie said that the firm is seeing a "slowdown in secure networking market growth."

Additionally, the company's fourth-quarter sales forecast fell short of Wall Street projections.

Fortinet said at the report on Thursday that it would be concentrating more of its attention on rapidly expanding markets including security operations tools and SASE (secure access service edge). Today, SecOps products account for 10% of Fortinet's revenue, while SASE accounts for 20%.

During the financial analyst call, Xie said, "We are shifting our marketing and advertising team's focus upon the faster-growing operations for security and SASE marketplace over the next few quarters as a consequence to the slowdown in [the] secure infrastructure market."

"We have a significant competitive advantage in the SASE market due to our industry leadership in both a firewall as well as SD-WAN, which are the two largest aspects of SASE," he said.

According to Fortinet's third-quarter data, service revenue increased by about 28% on an annual basis to $868.7 million.