While CrowdStrike Holdings Inc (NASDAQ: CRWD) is a market leader in Endpoint Detection and Response (EDR), Fortinet Inc (NASDAQ: FTNT) enjoys a market leadership position in networking and security, according to Cantor Fitzgerald.
The Security and Infrastructure Software Analyst: Jonathan Ruykhaver initiated coverage of CrowdStrike with an Overweight rating and price target of $240. In a separate note, analyst Ruykhaver initiated coverage of Fortinet with an Overweight rating and price target of $70.
The CrowdStrike Thesis: The company does not just have a niche tool, but “an evolving cloud-native platform that enables rapid innovation and the ability to quickly expand into new security adjacencies,” Ruykhaver said in the CrowdStrike initiation note.
“We believe evidence of this is in CrowdStrike’s ability to consistently post net retention above 120%, combined with an impressive gross retention rate that has been running at 98% since the company’s F2Q20 IPO,” he added.
The analyst estimated CrowdStrike’s global total addressable market at more than $100 billion.
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The Fortinet Thesis: The company has built a platform that targets two lucrative markets in enterprise networking and cybersecurity, which are “set for strong secular tailwinds in the near to longer term," Ruykhaver said in the Fortinet initiation note.
“We rank Fortinet as the clear market leader in navigating the challenging hardware appliance market,” he added. “Fortinet is pursuing a unique and large market opportunity estimated to reach ~$200 billion in the addressable market globally by 2026E centered on the convergence of Security-Driven Networking,” the analyst further mentioned.
CRWD, FTNT Price Action: Shares of CrowdStrike had climbed 2.32% to $175.95, while Fortinet’s stock had risen by 1.05% to $50.98 at the time of publication Thursday.
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