网络安全：Fortinet的超预期表现是否为其他供应商发出信号？

Cybersecurity: Is FTNT upside surprise a signal for other vendors? revenue growth beat (+6.9% vs.midpoint guide)since the'21 CoviD demand bubble. Thisis relative to"normal"beats in the 2-3% range. Yes,~1% of the beat can be attributed topassing through higher memory prices on appliances, but that still leaves a few % of extrathat the company chalked up in no small part to a bubble of demand infirewall appliancesto support Operational Technology ("OT")cybersecurity.OT cyber focuses on securingcritical physical device infrastructure that includes more and more embedded softwareandeven network/internetconnected,suchasmedicaldevices,power/energygrids,ormanufacturing equipment.We understand this demand reflects recent Middle-East frictionandnation-state hacks such as Strykercombined with newEurope OT regulations and theposture. In our Fortinet model published after earnings, it implicitly anticipates this excessdemandremains elevatedforseveralquarters,perhaps intonext yearas US and Europeancompanies evaluate and address their exposure.It made us think...what other cybervendors in ourcoveragecould seeOTcybertailwinds? +19173448390peter.weed@bernsteinsg.com +19173448463armin.hadavi@bernsteinsg.com OT Network security leaders are Fortinet and Palo Alto.According to Gartner, they areeffectively tied for #1 in OT Network Security, both with a similar market share.We wonderif this could show up as excess strength in Palo Alto's firewall appliances this quarter.Perhaps a few $1OMM are possible, but we do notethe actual regulation forcing OT cybercompliance is in Europe (US is a bit lighter touch, as you can see in the link above), whereFortinet's revenue over-indexes by 2x vs. Palo Alto. On the other hand, the Stryker hack andindustry noisearestrong inthe US, soperhapsdemandwill beelevatedonboth sidesof theAtlantic. We don't anticipate it would have as much benefit for Palo Alto's NGS ARR,unlessitsendpointorSSEarepartofthepull like.. manufacturing,energy) includingbroadOS supportand securingfor segmented networks(for instance,protected from direct internet access).Their Singularity platform is designedto secure unmanaged, internet-connected devices (loT/lloT)that cannot host traditionalsecurity agents, such as industrial control systems,surveillance cameras,and buildingautomation systems.In addition, CrowdStrikeis making strides with recent announcementsof its own OT/loT capabilities, and historic relationships with partners like Dragos Nottobeleft behind,SASE/SSEis alsotryingtobe relevant inOT.Zscaler acquiredAirgap Technologies in 2024 to get closerto the OT/loT security space.They offer analternative approach to OT network securitythat is intendedto overcomechallenges withthe use ofphysical appliance firewalls,particularly incomplete coverage dueto challengingimplementation approach.Not to mention, Cloudflare emphasizes similar approaches.with partners like Brixio deploying them for IT/OT converged cyber solutions.We noteCloudflare's focus seemsthinner and wasn'ta discussedtailwind in their Q1 earnings Will there be a noticeable bump outside of firewall appliances? We aren't sure.Wearelookingforwardtothe upcoming earnings for Palo Alto, SentinelOne, CrowdStrike,andZscaler to see if any of all of them geta little extrajuice"from the urgency and governmentprodding on OT cybersecurity. References to"Bernstein"or the"Firm"in these disclosures relate to the following entities: Bernstein Institutional Services LLC (April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024onwards),SanfordC.Bernstein(HongKong)Limited盛博香港有限公司，SanfordC.Bernstein(Canada)Limited,SanfordC. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited,Africa Technologies &Services toproduce Bernstein research under a Global Services Agreementinplacebetween BernsteinandSocieteGenerale otherwise,for purposes of these disclosures,references to Bernstein's"affiliates"relate to both SG and AB and their respectiveaffiliates. multiple.P / Sales (Next 5-8Q) compmultiple is selected in the>10%OpM Cloud SaaS cohort from our valuation frameworkanalysis.Because of its large hardwarefootprint, we discount themultiple consistent with its historical level.We assume currentCloud SaaSmultiplesregression lineremains consistentfor1+year. Our target price$209 isa 50/50 average of DCF (with 10% WACC and 3% terminal growth) and P / Sales (Next 5-8Q) compbased valuation framework analysis.We assume current Cloud SaaSmultiples regression line remains consistentfor 1+year. SentinelOne Inc Our price target of $19 is an average of DCF (12% WACC, 3% terminal growth) and 5.5x P / Sales (Next 5-8Q) comp multiple.P / Sales (Next 5-8Q) comp multiple is selected in the high-growth proportion of Ro4O Cloud SaaS cohort from our valuationframework analysis.We assume the current Cloud SaaSmultiplesregression line remains consistentfor1+y