Technology

3 Security Software Stocks to Buy as IT Budgets Continue to Explode

Fortinet

This company is very well liked on Wall Street, and it has had a solid run. Fortinet Inc.’s (NASDAQ: FTNT) fast, secure and global cybersecurity solutions provide broad, high-performance protection against dynamic security threats while simplifying the IT infrastructure. They are strengthened by the industry’s highest level of threat research, intelligence and analytics. Unlike pure-play network security providers, Fortinet can solve organizations’ most important security challenges, whether in networked, application or mobile environments — be it virtualized-cloud or physical

Fortinet reported second-quarter revenues of $239.8 million, an increase of 30% on a year-over-year basis, beating analyst estimates of $227 million. Product revenues rose 34% to $114.8 million, and service and other revenues rose 26.5% to $125 million. The increase in revenues can be attributed mainly to strength in Fortinet’s network security segment. Wall Street also cheered as the company said the tone of business is very strong.

The company recently unveiled its new Cyber Threat Assessment program designed to provide organizations a detailed look into the type and number of cyber-threats posing risks to their networks, yet are going undetected by their existing security solutions.

UBS Makes Big Changes to Quality Growth at a Reasonable Price Portfolio

The Deutsche Bank price target for Fortinet is $52, and the consensus target is $51.52. Shares closed Tuesday at $46.93.

Check Point Software Technologies

This company remains one of the top tech stocks to buy on Wall Street for a security presence. Check Point Software Technologies Ltd. (NASDAQ: CHKP) is one of the best in helping customers protect against advanced persistent threats. Check Point is considered a worldwide leader in securing the Internet, providing customers with uncompromised protection against all types of threats, reduces security complexity and lowering the total cost of ownership. Check Point first pioneered the industry with FireWall-1 and its patented stateful inspection technology.

The Deutsche Bank team pointed out in a previous report that the company’s revenue growth rate has accelerated almost every quarter over the past year and a half. Many on Wall Street think that Check Point should see year-over-year accelerating growth in product licenses, particularly as the security firewall refresh appears to be in the beginning stages. The analysts did say that said checks at the conference were somewhat more mixed, citing a lack of innovation and a higher cost with all the blade subscriptions required.

The Deutsche Bank price target is $95, and the consensus target is set at $92.92. The stock closed most recently at $81.29.

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The Deutsche Bank team basically says that the conference chatter points to the fact that, at least for now, there is no bubble in the security stocks. While some could perhaps use a breather, the industry is hot because it is desperately needed. IT safety and security at high levels is not a luxury anymore, it is a necessity. Aggressive growth investors need to carve out a slot in their portfolios for some of these stocks.

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