SUNNYVALE, Calif. - Fortinet (NASDAQ: NASDAQ:FTNT), a global leader in broad, integrated, and automated cybersecurity solutions, announced the completion of its acquisition of Lacework, a company specializing in cloud security and cloud-native application protection platforms (CNAPP), on Thursday. The acquisition, effective as of August 1, 2024, aims to enhance Fortinet's capabilities in securing cloud environments.
According to Ken Xie, Fortinet's Founder, Chairman of the Board, and CEO, the integration of Lacework's cloud-native platform with Fortinet's Security Fabric is expected to create one of the most comprehensive AI-driven cloud security platforms available from a single vendor. Lacework's technology has been recognized by industry analysts and was recently cited in the 2024 Gartner (NYSE:IT) Market Guide for Cloud-Native Application Protection Platforms.
The acquisition also adds 225 patents and applications to Fortinet's portfolio, many of which are related to cloud security and artificial intelligence, bringing the company's global patent count to over 1,800. This figure is estimated to surpass the combined total of the nearest three pure-play security vendors.
Fortinet has also acquired an experienced sales team and a group of engineers from Lacework. These new team members are expected to play a key role in delivering industry-leading solutions to Fortinet's customers.
The financial details of the transaction have not been disclosed. The move by Fortinet is part of a broader trend in the cybersecurity industry, where companies are increasingly looking to bolster their cloud security offerings as more businesses migrate to cloud environments.
This news is based on a press release statement and provides a factual summary of Fortinet's recent acquisition without any endorsement of claims. The acquisition is a strategic step for Fortinet in expanding its security services and demonstrates the company's commitment to evolving cybersecurity solutions that address the challenges of modern cloud-based infrastructures.
In other recent news, Fortinet has been the subject of various analyst revisions following its recent financial performance. The company failed to meet or lowered its financial targets in the past three consecutive quarters, leading Guggenheim to downgrade the stock from a Buy to a Neutral rating. Barclays (LON:BARC), Piper Sandler, and BMO Capital Markets have all reduced their price targets for Fortinet to $70, maintaining their respective Equalweight and Neutral ratings. Truist Securities, however, has upheld a Buy rating with a $70 target.
Fortinet's first-quarter results showed mixed outcomes, with a 1% year-over-year decline in billings expected for the second quarter. Despite this, Fortinet's Secure Access Service Edge (SASE) offering saw growth, with a notable increase in its mix to 24% and a year-over-year pipeline growth of 45%.
The cybersecurity company also announced its acquisition of Lacework, an AI-powered cloud security firm. This move is expected to enhance Fortinet's security offerings, particularly in the expanding SASE market. The transaction is anticipated to close in the second half of 2024, subject to regulatory approvals and customary closing conditions.
These recent developments highlight Fortinet's ongoing efforts to navigate the dynamic cybersecurity market and deliver robust, innovative solutions to its customers.
InvestingPro Insights
Fortinet's recent acquisition of Lacework is a strategic expansion into cloud security, a move that is reflected in the company's robust financial and operational health. According to InvestingPro data, Fortinet boasts an impressive gross profit margin of 77.13% over the last twelve months as of Q1 2024, signaling strong operational efficiency in generating revenue. The company's revenue growth remains solid, with a 14.2% increase over the last twelve months, underscoring its capacity for expansion and scalability.
An InvestingPro Tip highlights that Fortinet has been actively managing its share structure through aggressive buybacks, which can often signal a company's confidence in its own future prospects. Additionally, Fortinet's balance sheet strength is evident, as it holds more cash than debt, providing financial flexibility and stability.
While Fortinet is trading at a high earnings multiple with a P/E Ratio of 36.65, it's worth noting that the company is profitable over the last twelve months and analysts predict it will remain profitable this year. This valuation reflects the market's optimism about Fortinet's ability to maintain its profitability in the competitive cybersecurity landscape.
For those interested in deeper analysis, InvestingPro offers additional insights on Fortinet, including 14 more InvestingPro Tips that can help investors understand the company's valuation and performance metrics in greater detail.
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