{"id":59670,"date":"2024-09-04T06:00:48","date_gmt":"2024-09-04T10:00:48","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=59670"},"modified":"2024-09-05T12:58:03","modified_gmt":"2024-09-05T16:58:03","slug":"why-crowdstrike-and-fortinet-could-be-septembers-top-performers","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2024\/09\/why-crowdstrike-and-fortinet-could-be-septembers-top-performers\/","title":{"rendered":"Why CrowdStrike and Fortinet Could Be September's Top Performers"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">August was a wild ride for the S&amp;P 500, marked by sharp swings that kept investors on their toes. After a sharp 6.1% drop in the first three days, the large-cap benchmark managed to rebound, closing the month with a 2.3% gain. The S&amp;P 500 finished August<\/span><a href=\"https:\/\/www.cnbc.com\/2024\/08\/29\/stock-market-today-live-updates.html\"> <span style=\"font-weight: 400;\">at 5,648.40<\/span><\/a><span style=\"font-weight: 400;\">, just shy of its record high from mid-July.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Surprisingly, the so-called \u201cMagnificent Seven\u201d stocks that have driven much of the market\u2019s momentum this year, didn\u2019t top the<\/span><a href=\"https:\/\/www.msn.com\/en-us\/money\/news\/magnificent-7-miss-out-2-cybersecurity-stocks-stand-firm-retailers-lag-in-volatile-august-here-are-the-top-s-p-500-gainers-and-losers\/ar-AA1pMjTI?ocid=msedgntphdr&amp;cvid=fd09bdb638b4442b8166bdf2f877c670&amp;ei=8\"> <span style=\"font-weight: 400;\">gainers list<\/span><\/a><span style=\"font-weight: 400;\">. Instead, two cybersecurity giants,<\/span><a href=\"https:\/\/quotes.ino.com\/charting\/?s=NASDAQ_CRWD\"> <span style=\"font-weight: 400;\">CrowdStrike Holdings, Inc. (CRWD)<\/span><\/a><span style=\"font-weight: 400;\"> and<\/span><a href=\"https:\/\/quotes.ino.com\/charting\/?s=NASDAQ_FTNT\"> <span style=\"font-weight: 400;\">Fortinet, Inc. (FTNT)<\/span><\/a><span style=\"font-weight: 400;\">, took the spotlight. With their recent performance, there's an expectation that these companies could be September\u2019s top performers. So, what\u2019s fueling their rally?<\/span><\/p>\n<p><b>CrowdStrike\u2019s Rebound from Its Global-Outage-Induced Slump<\/b><\/p>\n<p><span style=\"font-weight: 400;\">July 19 was a tough day for CrowdStrike investors. A software update from the company led to a major IT outage that affected some of its biggest clients, including airlines and banks, causing an estimated $5.4 billion in losses. This sparked fears that the brand damage could hurt CrowdStrike's future business.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a result, CRWD stock took a hit, plunging 36% to a low of $218 by early August. It was the second-worst performer in the S&amp;P 500 during July. However, the company managed to turn things around in August, with its stock climbing 20% for the month to rank as the index\u2019sc<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investors were relieved to see that the fallout from the outage wasn't as severe as initially feared. When the company reported earnings, it did lower its guidance but reassured investors that customers still wanted to do business with it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the<\/span><a href=\"https:\/\/ir.crowdstrike.com\/news-releases\/news-release-details\/crowdstrike-reports-second-quarter-fiscal-year-2025-financial\"> <span style=\"font-weight: 400;\">second quarter<\/span><\/a><span style=\"font-weight: 400;\">, CRWD generated $963.87 million in revenue, up 32% year-over-year, beating the high end of management's forecast. Perhaps it suggests the global outage in July had a minimal financial impact, especially since it occurred just two weeks before the quarter\u2019s end. However, for fiscal 2025, the company adjusted its full-year revenue forecast slightly downward to a range of $3.89 billion to $3.90 billion, from the previous $3.98 billion to $4.01 billion. Despite this, the new forecast still indicates a healthy 27.5% growth from fiscal 2024, which is encouraging for investors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the bottom line, its non-GAAP attributable net income came in at $260.76 million or $1.04 per share, reflecting an increase of 44.9% and 40.5% year-over-year, respectively. Despite the challenges, the company\u2019s long-term outlook remains promising, with a goal to reach $10 billion in annual recurring revenue (ARR) by fiscal 2031. This ambitious target represents a potential 159% growth over the next six years. Moreover, CrowdStrike's introduction of \u201ccommitment packages\u201d for customers is expected to positively impact the net new ARR.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Analysts like Stephen Bersey remain optimistic about CrowdStrike\u2019s future and believe that \u201c<\/span><a href=\"https:\/\/www.marketwatch.com\/story\/crowdstrikes-stock-nabs-an-upgrade-the-bad-news-is-behind-us-bce07413?mod=article_inline\"><span style=\"font-weight: 400;\">the bad news is behind us<\/span><\/a><span style=\"font-weight: 400;\">.\u201d In this view, \u201cCrowdStrike\u2019s native-AI design gives it a structural competitive advantage and places it ahead of peers and leverages AI-driven growth.\u201d With that said, CRWD\u2019s 20% gain in August could be just the start of a continued recovery in September.<\/span><\/p>\n<p><b>Fortinet\u2019s Strong Comeback Reverses Six-Month Downtrend<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Fellow cybersecurity company, Fortinet\u2019s impressive rebound in August has been a breath of fresh air for investors who were reeling from its previous billings miss. After a robust earnings report that exceeded expectations, the cybersecurity giant made a strong comeback reversing a six-month downtrend, which sent its stock soaring as much as 28% on that day.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The company's strong market position has translated into an impressive financial performance. In the<\/span><a href=\"https:\/\/investor.fortinet.com\/news-releases\/news-release-details\/fortinet-reports-second-quarter-2024-financial-results\"> <span style=\"font-weight: 400;\">second quarter<\/span><\/a><span style=\"font-weight: 400;\"> of 2024, FTNT\u2019s revenues increased 10.9% year-over-year to $1.43 billion, driven by strong growth in services revenues. Its non-GAAP net income amounted to $439.90 million and $0.57 per share, indicating an increase of 46.4% and 50% year-over-year, respectively.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Building on this quarter\u2019s momentum, Fortinet projects third-quarter revenues between $1.45 billion and $1.51 billion, alongside billings of $1.53 billion to $1.60 billion. Shares of FTNT have already surged more than 30% year to date, catching the attention of both investors and analysts. With the cybersecurity sector booming and Fortinet's continued innovation in security solutions, the company is well-positioned to capitalize on emerging trends.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fortinet\u2019s strength lies in its robust market position and relentless focus on innovation. The company's FortiOS operating system and Security Fabric architecture provide a seamless and integrated security solution that meets the complex demands of today's digital landscape. Moreover, FTNT\u2019s commitment to innovation is evident in its development of advanced technologies like AI-powered FortiGuard Labs and the GenAI assistant, FortiAI, which streamline threat investigation and network management.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For 2024, FTNT anticipates revenue between $5.8 billion and $5.9 billion, with a non-GAAP operating margin of 30% to 31.5%. Non-GAAP earnings per share are projected to fall between $2.13 and $2.19. As the focus on digital security intensifies, Fortinet\u2019s cutting-edge solutions are well-positioned to maintain its leadership in the industry.<\/span><\/p>\n<p><b>Bottom line<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Cyber-attacks are becoming more frequent and severe, with a 30% year-over-year increase in weekly attacks on corporate networks in the second quarter of 2024 and a 25% rise compared to the previous quarter. On average, organizations now face<\/span><a href=\"https:\/\/www.darkreading.com\/cyberattacks-data-breaches\/check-point-research-reports-highest-increase-of-global-cyber-attacks-seen-in-last-two-years\"> <span style=\"font-weight: 400;\">1,636 attacks per week<\/span><\/a><span style=\"font-weight: 400;\">, highlighting the relentless and sophisticated nature of today's cyber threats.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As businesses increasingly prioritize digital security, the cybersecurity market is projected to soar, reaching<\/span><a href=\"https:\/\/www.grandviewresearch.com\/industry-analysis\/cyber-security-market\"> <span style=\"font-weight: 400;\">$500.70 billion by 2030<\/span><\/a><span style=\"font-weight: 400;\">, growing at a CAGR of 12.3%. This continued expansion in the cybersecurity sector could create a promising environment for CRWD and FTNT, making them attractive additions to your portfolio.<\/span><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>August was a wild ride for the S&amp;P 500, marked by sharp swings that kept investors on their toes. After a sharp 6.1% drop in the first three days, the large-cap benchmark managed to rebound, closing the month with a 2.3% gain. The S&amp;P 500 finished August at 5,648.40, just shy of its record high [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":41,"featured_media":58310,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[34714,32579,34715,34536,34717,34719,34537,34718,34123,34716],"class_list":["post-59670","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-500-70-billion-by-2030","tag-32579","tag-636-attacks-per-week","tag-crowdstrike-holdings","tag-fortinet","tag-gainers-list","tag-inc-crwd","tag-inc-ftnt","tag-second-quarter","tag-the-bad-news-is-behind-us"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why CrowdStrike and Fortinet Could Be September&#039;s Top Performers - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"description\" content=\"Two of the cybersecurity giants rallied on Friday, capping off a strong August that saw them rank among the biggest S&amp;P 500 gainers. 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