Fortinet downgraded to Market Perform on declining demand at William Blair

William Blair analyst Jonathan Ho downgraded Fortinet to Market Perform from Outperform without a price target. For the second quarter in a row, Fortinet delivered disappointing results and guidance that reflects declining demand for its firewall hardware, the analyst tells investors in a research note. The firm says that while Fortinet is making the right decision to pursue faster growth areas of the market and to lessen its “often-criticized dependency” on hardware, the company is making this transition late relative to competitors. Blair believes there are also significant risks around its ability to serve both hardware and software-as-a-service oriented markets simultaneously.