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Exam Code: NSE5 Practice test 2022 by Killexams.com team
NSE5 Fortinet Network Security Expert 5 Written (500)

The Network Security Analyst designation recognizes your ability to implement network security management and analytics using Fortinet security devices.

You must successfully pass a minimum of any two Fortinet NSE 5 certification exams:
Fortinet NSE 5 - FortiAnalyzer
Fortinet NSE 5 - FortiManager
Fortinet NSE 5 - FortiSIEM
Fortinet NSE 5 - FortiClient
To prepare for the certification exams, we recommend that you take the corresponding NSE 5 product courses. The courses are optional.

Fortinet Network Security Expert 5 Written (500)
Fortinet Fortinet test
Killexams : Fortinet Fortinet test - BingNews https://killexams.com/pass4sure/exam-detail/NSE5 Search results Killexams : Fortinet Fortinet test - BingNews https://killexams.com/pass4sure/exam-detail/NSE5 https://killexams.com/exam_list/Fortinet Killexams : Fortinet authentication bypass flaw exploited in the wild; security experts call patching critical

The Fortinet authentication bypass vulnerability that was discovered last week and has been confirmed in the wild was the subject of at least two latest research blogs and on Tuesday was entered into the CISA Known Exploited Vulnerabilities (KEV) Catalog.

Fortinet released an update on Monday that detailed how security teams can check their logs for indicators of compromise, a syllabu that was also covered in a blog yesterday by Horizon3.ai.

Jerrod Piker, competitive intelligence analyst at Deep Instinct, explained that this exploit  – CVE-2022-40684 – functions as a vulnerability in the HTTP/S admin access to most Fortinet solutions. Piker said any organizations that deployed Fortinet devices running FortiOS, FortiProxy, or FortiSwitchManager should immediately respond to this alert, especially since CVE-2022-40684 has been exploited in the wild.

Piker added that the vulnerability lets an unauthenticated user perform administrative actions through the HTTP/S administration portal. These actions may include, but are not limited to: admin SSH key modification to allow access by remote attacker; creation of new local users; modification of configuration to reroute traffic; and access to full system configurations.

Mike Parkin, senior technical engineer at Vulcan Cyber, said vulnerabilities in security products are always problematic, especially when it’s on an edge or gateway device.

“While Fortinet has released an update and offers workarounds that could mitigate the risk, because there’s evidence this has already been exploited in the wild, anyone using the affected products should update sooner, rather than later, and at least restrict access to the devices per industry best practices,” Parkin said.

David Farquhar, solutions architect at Nucleus Security, which also published a blog on Tuesday by Ryan Cribelar on this vulnerability, said the Fortinet products are the types of devices that live at the edge of the network, so they are intended to protect it. As a result, Farquhar said they are the very last place that organizations want an attacker getting access to the management interface.

“In theory, you shouldn’t have that management interface accessible on the internet,” Farquhar said. “Unfortunately, sometimes an organization will make that management interface accessible temporarily, but then forget to close it back up, leaving them exposed. This is one reason why it’s very important to make sure that security teams are scanning all of their publicly-facing address space and looking for things that shouldn’t be there, like management interfaces."

Wed, 12 Oct 2022 09:59:00 -0500 en text/html https://www.scmagazine.com/news/vulnerability-management/fortinet-authentication-bypass-flaw-exploited-in-the-wild-security-experts-call-patching-critical
Killexams : Concerns Over Fortinet Flaw Mount; PoC Released, Exploit Activity Grows

Concerns over a critical authentication bypass vulnerability in certain Fortinet appliances heightened this week with the release of proof-of-concept (PoC) exploit code and a big uptick in vulnerability scans for the flaw.

The bug (CVE-2022-40684) is present in multiple versions of Fortinet's FortiOS, FortiProxy and FortiSwitchManager technologies. It allows an unauthenticated attacker to gain administrative access to affected products via specially crafted HTTPS and HTTP requests, and potentially use that as entry point to the rest of the network.

Bharat Jogi, director of vulnerability threat research at Qualys says researchers at the company have observed mass scans being carried out by various threat actors to identify Internet facing vulnerable systems for compromise.

"They are compromising these systems to create a super_admin user which provides them with complete access and control," Jogi says. "Once this level of access is achieved, they have the ability to delete any trace of their successful exploitation attempt, making it difficult for organizations to track compromised assets in their environment."

If this flaw is successfully exploited, an attacker would have complete access to the organization's internal systems that were previously protected by Fortinet's firewalls, he says. "Having a compromised firewall is like laying out a red carpet for threat actors to stroll right into your organization's environment," Jogi notes.

Added to CISA's Known Exploited Vulnerabilities Catalog

The US Cybersecurity and Infrastructure Security Agency (CISA) earlier this week added the vulnerability to its Known Exploited Vulnerabilities catalog. Federal executive branch agencies—which are required to remediate vulnerabilities in the catalog within specific deadlines—have until Nov. 1 to address it. Though the deadline applies only to federal agencies, security experts have previously noted how it is a good idea for all organizations to monitor the vulnerabilities in the catalog and follow CISA's deadline for implementing fixes.

Fortinet privately notified customers of the affected products about the vulnerability last Friday, along with instructions to immediately update to patched versions of the technology the company had just released. It advised companies that could not update for any reason to immediately disable Internet-facing HTTPS administration until they could upgrade to the patched versions. 

"Due to the ability to exploit this issue remotely, Fortinet is strongly recommending all customers with the vulnerable versions to perform an immediate upgrade," Fortinet said in its private notification, a copy of which was posted on Twitter the same day.

Fortinet followed up with a public vulnerability advisory on Monday describing the flaw and warning customers of potential exploit activity. The company said it was aware of instances where attackers had exploited the vulnerability to get the configuration file from affected systems and to add a malicious super_admin account called "fortigate-tech-support".

Since then, penetration testing from Horizon3.ai has released proof-of-concept code for exploiting the vulnerability along with a technical deep dive of the flaw. A template for scanning for the vulnerability has also become available on GitHub.

Exacerbating the concerns is the relatively low bar for exploiting the flaw. "This vulnerability is extremely easy for an attacker to exploit. All that is required is access to the management interface on a vulnerable system," Zach Hanley, chief attack engineer at Horizon3.ai, tells Dark Reading

Increase in Scanning Activity for the Flaw

Qualys isn't the only company observing increased vulnerability scanning for the flaw. James Horseman, exploit developer at Horizon3.ai says public data from GreyNoise—which tracks Internet scanning activity hitting security tools—shows the number of unique IPs using the exploit has grown from the single digits a few days ago, to over forty as of Oct. 14.

"We expect the number of unique IPs using this exploit to rapidly increase in the coming days," Horseman says. It is not hard for attackers to find vulnerable systems, he adds: A Shodan search for instance shows more than 100,000 Fortinet systems worldwide. 

"Not all of these will be vulnerable, but a large percentage will be," Horseman says.

Johannes Ullrich, dean of research at the SANS Institute, says he has observed scans associated with an older FortiGate vulnerability (CVE-2018-13379,) hitting SANS' honeypots in the days following disclosure of the new bug. He says there are two theories why that might be happening.

One of them is that an attacker may have tried to catch as many devices as possible that had not yet been patched for the old vulnerability. Given the attention the new vulnerability has gotten it is likely the old vulnerability will get patched as well now, he says.

"Or the attacker was trying to find Fortinet devices to exploit using the new vulnerability once it is available," he theorizes. "The old vulnerability scanner they had sitting on the shelf may still work to identify Fortinet devices."

A Popular Attacker Target

Concerns over vulnerabilities in Fortinet products are not new. The company's technologies—and those of others selling similar appliance—have been frequently targeted by attackers trying to gain an initial foothold on target network. 

Last November. The FBI, CISA and others issued an advisory warning of Iranian advanced persistent threat actors exploiting vulnerabilities in Fortinet and Microsoft products. A similar alert in April 2021 warned of attackers exploiting flaws in FortiOS to break into multiple government, commercial, and technology services.

"These vulnerable devices are often edge devices, so an attacker could potentially use this vulnerability to gain access to an organization's internal networks to launch further attacks," Hanley says.

Fortinet itself has recommended that organizations that are able to, must update to the newly patched versions of FortiOS, FortiProxy and FortiSwitch Manager. For organizations that cannot immediately update, Fortinet has provided guidance on how to disable the HTTP/HTTPS interface or limit IP addresses that can reach the administrate interface of the affected products.

Hanley says organizations sometimes may not be able to patch due to the potential downtime associated with updating a device. "However, an organization should be able to apply [the] workaround to prevent this vulnerability from being exploited on unpatched machines by following Fortinet’s guidance."

Qualys' Jogi adds, "It is also crucial to review any attempts of exploit to identify systems that may have already been compromised. If an organization is unable to patch their systems, then they must disable the system admin interface immediately."

Fri, 14 Oct 2022 07:43:00 -0500 en text/html https://www.darkreading.com/attacks-breaches/concerns-fortinet-flaw-poc-increased-exploit-activity
Killexams : Patch Now: Fortinet FortiGate & FortiProxy Contain Critical Vuln

UPDATE

A Fortinet bug disclosed last week is now under active exploitation. 

Fortinet on Friday warned that users of its FortGate firewall and FortiProxy Web proxies should apply the latest updates to their products ASAP due to a critical vulnerability that could allow an attacker to bypass authentication to the products' administration interfaces. 

On Monday, the security firm updated the advisory to note that it's now aware of instances of the bug being exploited in the wild.

An exploit would in effect give an attacker administrative control of the network devices. The flaw, CVE-2022-40684, affects FortiOS versions 7.0.0 to 7.06 and 7.20 to 7.2.1, and FortiProxy versions 7.0.0 to 7.0.6 and 7.2.0, and could allow an attacker to use "specially crafted HTTP or HTTPS requests" to execute admin operations, according to Fortinet.

"Due to the ability to exploit this issue remotely Fortinet is strongly recommending all customers with the vulnerable versions to perform an immediate upgrade," Fortinet said in its advisory, which was cited on Twitter.

SANS Internet Storm Center (ISC), which reported the advisory, provided additional advice: "If you have Fortinet products managed by a 3rd party, we also recommended you to cross-check with them to ensure the upgrade will be performed," SANS Interior Storm Center handler Xavier Mertens said in a post in the ISC Diary.

“We are committed to the security of our customers. Fortinet recently distributed a PSIRT advisory (FG-IR-22-377) that details mitigation guidance for customers and recommended next steps," according to a Fortinet media statement. "We continue to monitor the situation and have been proactively communicating to customers, strongly urging them to immediately follow the guidance provided in connection with CVE-2022-40684.”

This article was updated at 2 p.m. on Oct. 10 to include information on the bug's active exploitation in the wild, and at 11 a.m. Oct. 11 to include Fortinet's media statement.

Tue, 11 Oct 2022 09:06:00 -0500 en text/html https://www.darkreading.com/vulnerabilities-threats/patch-now-fortinet-fortigate-and-fortiproxy-contain-critical-vuln
Killexams : Fortinet Confirms Zero-Day Vulnerability Exploited in One Attack

Fortinet has confirmed that the critical vulnerability whose existence came to light last week is a zero-day flaw that has been exploited in at least one attack.

The company privately informed some customers last week about the availability of patches and workarounds for an authentication bypass vulnerability exposing FortiOS and FortiProxy products to remote attacks.

The flaw, tracked as CVE-2022-40684, can allow a remote, unauthenticated attacker to perform unauthorized operations on the targeted appliance’s admin interface using specially crafted HTTP or HTTPS requests.

Fortinet on Monday made public an advisory for CVE-2022-40684 and warned that it’s aware of one attack involving exploitation of the zero-day. The company has provided an indicator of compromise (IoC) that customers can use to check if their appliances have been hacked.

It’s likely that exploitation of the vulnerability occurred before Fortinet released a patch. Limited exploitation of a security flaw typically suggests that a sophisticated threat actor — likely a state-sponsored group — is behind the attacks.

However, details and proof-of-concept (PoC) exploits are expected to become publicly available in the coming days, which will allow other threat actors to add the exploit to their toolset.

Researcher Carlos Vieira said the vulnerability is “really simple to exploit and easy to weaponize” and warned that exploitation can lead to a full device takeover.

SANS Institute reported seeing an increase in scans for an old Fortigate vulnerability and the company believes someone may be trying to create a list of potential targets for CVE-2022-40684 exploitation.

According to Fortinet’s advisory, in addition to FortiProxy web gateways and security appliances running FortiOS, the flaw impacts FortiSwitch Manager, the management platform for FortiSwitch switches. Versions 7.0.x and 7.2 are affected and patches are included in versions 7.0.7, 7.2.1 and 7.2.2.

There are many vulnerable devices that are exposed to the internet, which makes widespread exploitation very likely. It’s not uncommon for threat actors to target Fortinet devices in their attacks.

Related: Vulnerabilities in Fortinet WAF Can Expose Corporate Networks to Attacks

Related: Fortinet Patches High-Severity Vulnerabilities in Several Products

Related: Tens of Thousands of Unpatched Fortinet VPNs Hacked via Old Security Flaw

Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.
Previous Columns by Eduard Kovacs:
Mon, 10 Oct 2022 23:13:00 -0500 en text/html https://www.securityweek.com/fortinet-confirms-zero-day-vulnerability-exploited-one-attack
Killexams : Fortinet Customers Told to Urgently Patch Remotely Exploitable Vulnerability

Fortinet has privately informed some customers about a critical and remotely exploitable vulnerability that poses a significant risk.

The cybersecurity firm does not appear to have released a public advisory, but in emails sent to customers the company revealed that its FortiOS and FortiProxy products are affected by a critical authentication bypass vulnerability on the admin interface. The issue is tracked as CVE-2022-40684.

The email has only been distributed to ‘select customers’ and it’s marked as ‘strictly confidential’, with recipients instructed not to share it outside their organization. However, copies of the email have been shared on social media and even on Fortinet forums by customers.

“Fortinet is providing an advanced notification of a critical severity authentication bypass using an alternate path or channel [CWE-88] in specific versions of FortiOS and FortiProxy that may allow an unauthenticated attacker to perform operations on the administrative interface via specially crafted HTTP or HTTPS requests,” Fortinet said.

The company has instructed customers to immediately update their products due to attackers being able to remotely exploit the vulnerability.

FortiOS versions between 7.0.0 and 7.0.6, and between 7.2.0 and 7.2.1 are affected, as well as FortiProxy 7.0.0 through 7.0.6 and 7.2.0. FortiOS patches are included in versions 7.0.7 and 7.2.2, and fixes for FortiProxy are included in 7.0.7 and 7.2.1. There have also been some unconfirmed reports that versions 6.x.x could also be impacted.

Users can also prevent attacks by ensuring that only trusted IP addresses can reach the affected products’ administrative interface.

Threat intelligence company GreyNoise says it will be keeping an eye out for exploitation attempts, but for the time being there is not enough information for them to be able to identify attacks.

Threat intelligence firm Cyberthint reported seeing more than 150,000 potentially vulnerable Fortinet product instances that are exposed to the internet.

While it’s unclear if attacks exploiting CVE-2022-40684 have already begun, it’s not uncommon for threat actors to target vulnerabilities in Fortinet products.

UPDATE: Fortinet has made its advisory public. The company has also informed customers about CVE-2022-33873, which allows an unauthenticated remote attacker to execute arbitrary commands in the underlying shell.

UPDATE 2: Fortinet has confirmed that CVE-2022-40684 is zero-day that has been exploited in at least one attack. 

Related: Vulnerabilities in Fortinet WAF Can Expose Corporate Networks to Attacks

Related: CISA Expands 'Must-Patch' List With Log4j, FortiOS, Other Vulnerabilities

Related: Fortinet Patches High-Severity Vulnerabilities in Several Products

Related: Tens of Thousands of Unpatched Fortinet VPNs Hacked via Old Security Flaw

Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.
Previous Columns by Eduard Kovacs:
Sun, 09 Oct 2022 22:51:00 -0500 en text/html https://www.securityweek.com/fortinet-customers-told-urgently-patch-remotely-exploitable-vulnerability
Killexams : Analyst Ratings for Fortinet

Fortinet FTNT has observed the following analyst ratings within the last quarter:

Bullish Somewhat Bullish Indifferent Somewhat Bearish Bearish
Total Ratings 2 6 1 0 0
Last 30D 0 1 0 0 0
1M Ago 1 1 0 0 0
2M Ago 0 1 0 0 0
3M Ago 1 3 1 0 0

In the last 3 months, 9 analysts have offered 12-month price targets for Fortinet. The company has an average price target of $71.56 with a high of $78.00 and a low of $65.00.

Below is a summary of how these 9 analysts rated Fortinet over the past 3 months. The greater the number of bullish ratings, the more positive analysts are on the stock and the greater the number of bearish ratings, the more negative analysts are on the stock

This current average has decreased by 5.59% from the previous average price target of $75.80.

Benzinga tracks 150 analyst firms and reports on their stock expectations. Analysts typically arrive at their conclusions by predicting how much money a company will make in the future, usually the upcoming five years, and how risky or predictable that company's revenue streams are.

Analysts attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish their ratings on stocks. Analysts typically rate each stock once per quarter or whenever the company has a major update.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

If you want to keep track of which analysts are outperforming others, you can view updated analyst ratings along withanalyst success scores in Benzinga Pro.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Fri, 07 Oct 2022 03:08:00 -0500 text/html https://www.benzinga.com/analyst-ratings/22/10/29186019/analyst-ratings-for-fortinet
Killexams : Fortinet issues emergency patches for FortiOS, FortiProxy and FortiSwitchManager

Fortinet Inc. today issued emergency patches for a number of its products after a severe vulnerability was discovered and exposed last week.

The vulnerability, designated CVE-2022-40684, is described by Fortinet as an authentication bypass. The bypass uses an alternate path or channel vulnerability in FortiOS, FortiProxy and FortiSwitchManager that may allow an unauthenticated attacker to perform operations on the administrative interface via a specifically crafted HTTP or HTPPS request. Fortinet noted that it’s aware of an instance where the vulnerability has been exploited.

Fortinet first let “select customers” know of the vulnerability via email last week. According to Security Week, copies of the email were shared on social media and Fortinet forums in the following days.

Versions of Fortinet software that are exposed to the vulnerability are FortiOS 7.0.0 to 7.06, 7.2.0 and 7.2.1; FortiProxy 7.0.0 to 7.0.6 and 7.2.0; and FortiSwitchManager 7.0.0 and 7.2.0. FortiOS has released patched versions for FortiOS 7.0.7 and 7.2.2 and above, FortiProxy 7.0.7 and 7.2.1 and above and FortiSwitchManager 7.2.1 or above.

Along with installing patches or newer versions of the affected software, Fortinet recommends users validate their systems against the user=”Local_Process_Access” in device logs. For those unable to install a patch, at least immediately, there are other options to address the vulnerability.

The workaround options for FortiOS and FortProxy include disabling the HTTP/HTTPS administrative access or limiting IP addresses that can reach the administrative interface. For FortiSwitchManager, the only option is to disable the HTTP/HTTPS administrative access. With all options, customers can also contact Fortinet customer support for assistance.

Although Fortinet has released patches and workarounds, the risk of the vulnerability being exploited continues to grow. The Horizon3 Attack Team posted on Twitter Inc. that it’s working on a proof-of-concept exploit that it plans to release later this week.

Fortinet did not disclose how many customers may be affected. However, cyberthreat intelligence platform company Cyberthint estimates that there are more than 150,000 Fortinet devices exposed.

Image: Fortinet

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Mon, 10 Oct 2022 20:16:00 -0500 en-US text/html https://siliconangle.com/2022/10/10/fortinet-issues-emergency-patches-fortios-fortiproxy-fortiswitchmanager/
Killexams : Fortinet Warns of New Auth Bypass Flaw Affecting FortiGate and FortiProxy

Fortinet has privately warned its customers of a security flaw affecting FortiGate firewalls and FortiProxy web proxies that could potentially allow an attacker to perform unauthorized actions on susceptible devices.

Tracked as CVE-2022-40684 (CVSS score: 9.6), the critical flaw relates to an authentication bypass vulnerability that may permit an unauthenticated adversary to carry out arbitrary operations on the administrative interface via a specially crafted HTTP(S) request.

The issue impacts the following versions, and has been addressed in FortiOS versions 7.0.7 and 7.2.2, and FortiProxy versions 7.0.7 and 7.2.1 released this week:

  • FortiOS - From 7.0.0 to 7.0.6 and from 7.2.0 to 7.2.1
  • FortiProxy - From 7.0.0 to 7.0.6 and 7.2.0

"Due to the ability to exploit this issue remotely, Fortinet is strongly recommending all customers with the vulnerable versions to perform an immediate upgrade," the company cautioned in an alert shared by a security researcher who goes by the alias Gitworm on Twitter.

As temporary workarounds, the company is recommending users to disable internet-facing HTTPS Administration until the upgrades can be put in place, or alternatively, enforce a firewall policy to "local-in traffic."

When reached for a comment, Fortinet acknowledged the advisory and noted that it's delaying public notice until its customers have applied the fixes.

"Timely and ongoing communications with our customers is a key component in our efforts to best protect and secure their organization," the company said in a statement shared with The Hacker News. "Customer communications often detail the most up-to-date guidance and recommended next steps to best protect and secure their organization."

"There are instances where confidential advance customer communications can include early warning on advisories to enable customers to further strengthen their security posture, which then will be publicly released in the coming days to a broader audience. The security of our customers is our first priority."


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Fri, 07 Oct 2022 16:39:00 -0500 Ravie Lakshmanan en text/html https://thehackernews.com/2022/10/fortinet-warns-of-new-auth-bypass-flaw.html
Killexams : Fortinet: Fairly Valued, Profitable And Growing Rapidly
Computer System Hacked. Virus Software Screen

AndreyPopov

Fortinet (NASDAQ:FTNT) is a cybersecurity powerhouse that is a leader in firewalls. According to Check Point Research, global cybersecurity attacks have increased by 32% year over year, with over 1,200 attacks per week globally. The rise of remote working, the cloud and Internet of Things (IoT) devices have widened the attack surface which has made networks more vulnerable to attack. Thus it's no surprise the global cybersecurity market was worth $139 billion in 2021 and is expected to grow at a rapid 13.4% compounded annual growth rate reaching $376 billion by 2029. Fortinet is poised to ride this trend as one of the largest cybersecurity companies in the industry, with best-in-class technology. The company's stock price has slid down by 29% from its all-time highs in December 2021, and the stock now looks to be fairly valued, while being profitable. In this post, I'm going to break down the company's business model, financials, and valuation, let's dive in.

Secure Business Model

The company's FortiGate Firewall solution makes up over one-third of firewall shipments globally, leaving competitors in the dust.

Fortinet firewall

Fortinet firewall (Investor Presentation 2022)

Fortinet's firewall is also rated as the number one market leader by Gartner and the platform has even won the customer choice award for 2022.

Fortinet firewall

Fortinet firewall (Gartner)

Its firewall solution offers a network security framework that offers threat prevention while also not limiting performance. Customer reviews also indicate the solution is "simple to use" and easier to set up which can be a real selling point for any digital transformation product. From the graphic below you can see the core hardware and software products are complimented by a series of security services that are sold on a subscription, which thus offers recurring revenue.

Fortinet products

Fortinet products (Investor Presentation)

Fortinet's technological success is driven by its proprietary ASIC (Application Specific Integrated Circuit) technology. This is a custom semiconductor design that enables higher performance to be achieved at a much lower cost than an off-the-shelf non-custom piece of hardware.

According to a latest survey of Chief Information Security Officers (CISOs) by Gartner, 75% of them are overwhelmed by the number of vendors and would like to consolidate with a small number of security providers. This is a large increase from 29% of CISOs in 2020. The cybersecurity industry is extremely fragmented with no one company making up over 10% market share. This offers an opportunity for Fortinet as they already have the second largest revenue, just behind Palo Alto Networks (PANW). Therefore as the industry consolidates Fortinet can offer customers its MESH platform that offers security from endpoint devices to the data center and hybrid cloud.

Fortinet

Fortinet solution (Investor presentation 2022)

Fortinet is also a Gartner Magic Quadrant leader in the software-defined WAN Edge Infrastructure. WAN stands for "Wide Area Network" and is basically the network that connects together a corporation's branch offices. The "software" part makes it much easier to scale, manage and extend this network.

Growing Financials

Fortinet generated solid financial results for the second quarter of 2022. Revenue was $1.03 billion which popped by 28.6% year over year and beat analyst estimates by $2.43 million. This growth was driven by strong product revenue of $400.7 million, which grew by a rapid 34.3% year over year, while its core platform grew revenue by 35% and extension products by 33%, which was a positive sign that its "land and expand" model is working.

Revenue

Revenue (Fortinet Q2 Earnings)

Total service revenue was $629 million, which increased by a rapid 25.2% year over year. This was driven mainly by security subscription service revenue which increased by 25% year over year to $340 million. Support service revenue also increased by a rapid 26% year over year to $289 million. Overall these revenue trends were pretty strong with diverse growth generated across the board.

Chart
Data by YCharts

If we take a step back, Billings which is the amount actually invoiced to customers and is the true "top line" for SaaS companies, also showed solid growth. Billings were $1.3 billion which increased by 36% year over year. This was driven by a strong 50% YoY increase in the number of larger customers, which transact over $1 million. This strategy of "growing upmarket" makes a lot of sense as larger customers tend to be more "sticky", have larger budgets, and more upsell opportunities. Fortinet's focus on vendor consolidation has been a key selling point that has made the platform popular with CISOs (Chief Information Security Officers). Service billings also accelerated with a 36% increase year over year. This was driven by pricing actions that offset headwinds from Russian services that had been halted.

Another great indicator to analyze with SaaS companies is "Bookings", this is a forward-looking metric that indicates the value of contracts signed by a customer. In this case, Bookings were $1.376 billion in the second quarter of 2022, which increased by 42% year over year. This was driven by strong Secure SD-WAN bookings which increased by 60% year over year, as the IT industry begins to converge networking and security together. The company also scored a larger number of global 2000 companies, which increased by 65% year over year.

Bookings

Bookings (Q2 Earnings Report)

Total Backlog which is the "unbilled" portion of the contract value was $350 million, which increased by $72 million and represented strong product demand. This was mainly driven by networking equipment, which made up ~50%, while FortiGates made up 40%. The track record shows this backlog is extremely strong and "sticky". Fortinet's, current customers make up over 95% of Backlog, and it is well diversified across customers. Management believes its Backlog will continue to increase in 2022, despite supply chain constraints which are making product shipping a challenge.

Backlog

Backlog (Q2 Earnings Report)

Fortinet is extremely diversified across various customer categories. For instance, larger enterprises make up 40% of its customer base which is the "safest" and most lucrative customer type, due to the aforementioned reasons. By geography, over 100 countries make up 47% of revenue, followed by 28% for the US. This is especially important given the increasing geopolitical uncertainty, driven by the Russia-Ukraine war. Its Industry diversification is also strong with its service being most popular by worldwide governments at 16% and "other industries" at 39%.

Customer Type

Customer Type (Q2 Report)

Moving onto profitability, Fortinet is solidly profitable with a GAAP operating margin of 19% and income of $147.5 million in Q2,22, which is fantastic. This is in sharp contrast to many other cybersecurity companies out there such as SentinelOne (S) which is unprofitable. Fortinet generated solid earnings per share of $0.21 in the second quarter, which beat analyst estimates by $0.05.

Chart
Data by YCharts

Fortinet also generated strong free cash flow of $283.5 million in Q2,22, although it was down from the $394.7 million generated in the prior year. This was driven by an increase in Days Sales Outstanding (DSO) to 14 days, this indicates the company is experiencing delays on its payments. This can be attributed to the timing of inventory deliveries from various contract manufacturers. The new R&D capitalization rules have impacted many businesses across the board and have caused a tax increase of between $85 million and $110 million for Fortinet.

The good news is Fortinet has a robust balance sheet with $1.755 billion in cash and short-term investments. In addition, the business has long-term debt of $984.9 million. In the six months ending on June 30th, 2022, Fortinet bought back over 25.8 million shares of stock at an average price of ~$57.82 per share, for approximately $1.49 billion. Management has also authorized a $1 billion increase in its share repurchase program.

Advanced Valuation

In order to value Fortinet, I have plugged the latest financials into my advanced valuation model which uses the discounted cash flow method of valuation. I have forecasted a 24% compounded annual growth rate on its revenue over the next 5 years, based on analyst estimates.

Fortinet stock valuation

Fortinet stock valuation (created by author Ben at Motivation 2 Invest)

I have forecasted the business's margin to increase to 27% over the next 8 years, as the company continues to upsell products and offer its high-margin security software solution. It should be noted that this margin includes an adjustment for R&D expenses which I have capitalized. Thus the reported base margin is actually 19% as mentioned prior and I expect this to increase to ~23%.

Fortinet stock valuation 2

Fortinet stock valuation 2 (created by author Ben at Motivation 2 Invest)

Given these factors I get a fair value of $48.81 per share, the stock is trading at $51 per share and thus is "fairly valued" in my eyes, given the strong profitability of the business.

As an extra data point, Fortinet trades at a Price to Earnings ratio = 48, which is fairly high but this is ~1% cheaper than its 5-year average.

Chart
Data by YCharts

Relative to other cybersecurity companies, Fortinet trades at a mid-range price-to-sales ratio = 9.2. For example, Palo Alto Networks is slightly cheaper with a PS ratio = 7.4.

Chart
Data by YCharts

Risks

Recession/Longer deal cycles

The high inflation and rising interest rate environment have caused many analysts to forecast a recession. Therefore I expect purchasing deals to take longer to close, as IT security teams delay new spending. The good news is Fortinet has increasingly focused on the Return on Investment (ROI) of its service and they even have an ROI calculator on its website. Thus longer term, the value proposition is still strong for businesses.

Competition

There are many competitors in the Cybersecurity industry. Top competitors according to Gartner include; Palo Alto Networks, Juniper (JNPR), Cisco (CSCO), Forcepoint, F5 (FFIV) and more. However, Fortinet has the highest-rated network firewall platform as mentioned prior.

Final Thoughts

Fortinet is a leading cybersecurity company that dominates the firewall industry. The company has expanded its product range and is now poised to benefit from trends such as industry growth and vendor consolidation. The stock is fairly valued, profitable, and growing steadily, thus this looks to be a great investment for the long term.

Tue, 04 Oct 2022 11:16:00 -0500 en text/html https://seekingalpha.com/article/4544696-fortinet-fairly-valued-profitable-and-growing-rapidly
Killexams : Analyst Ratings for Fortinet

Fortinet (NASDAQ:FTNT) has observed the following analyst ratings within the last quarter:

Bullish Somewhat Bullish Indifferent Somewhat Bearish Bearish
Total Ratings 2 6 1 0 0
Last 30D 0 1 0 0 0
1M Ago 1 1 0 0 0
2M Ago 0 1 0 0 0
3M Ago 1 3 1 0 0

In the last 3 months, 9 analysts have offered 12-month price targets for Fortinet. The company has an average price target of $71.56 with a high of $78.00 and a low of $65.00.

Below is a summary of how these 9 analysts rated Fortinet over the past 3 months. The greater the number of bullish ratings, the more positive analysts are on the stock and the greater the number of bearish ratings, the more negative analysts are on the stock

price target chart

This current average has decreased by 5.59% from the previous average price target of $75.80.

Benzinga tracks 150 analyst firms and reports on their stock expectations. Analysts typically arrive at their conclusions by predicting how much money a company will make in the future, usually the upcoming five years, and how risky or predictable that company's revenue streams are.

Analysts attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish their ratings on stocks. Analysts typically rate each stock once per quarter or whenever the company has a major update.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

If you want to keep track of which analysts are outperforming others, you can view updated analyst ratings along withanalyst success scores in Benzinga Pro.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

Fri, 07 Oct 2022 03:22:00 -0500 en text/html https://markets.businessinsider.com/news/stocks/analyst-ratings-for-fortinet-1031790345
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