Fortinet, Checkpoint added to Wedbush Best Ideas List as firm says no signs of growth slowdown

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Fortinet (NASDAQ:FTNT) and Checkpoint Software Technologies (NASDAQ:CHKP) were added to Wedbush’s best ideas list on Tuesday after the investment firm said it had not seen any signs of a major growth slowdown for the space.

“While a slowing macro and potential recession are being closely watched, priorities are clear for [Chief Information Officer] and [Chief information security officers] in this environment as protecting enterprises against rising sophisticated threats is a major issue for Boards and C- Level with more data migrating to the cloud and vulnerabilities across the board (endpoints, mobile, access levels),” analyst Dan Ives wrote in a note to clients.

Going further, Ives said that adding Fortinet (FTNT) and Checkpoint Software Technologies (CHKP) to the list shows the firm’s “high conviction” in the stocks, adding they are two of the firm’s favorite cyber security stocks.

Ives reiterated the outperform rating and $145 price target on Checkpoint Software Technologies (CHKP) and reiterated the outperform rating and raised the price target to $76 from $68 on Fortinet (FTNT).

In addition, Ives noted that even with the markets being skittish because of rising inflation, interest rates and concerns of a global recession, cyber security is still seeing strong growth and is viewed as a “safety blanket tech sector.”

“While investors will fret about valuations on hyper-growth names in the near-term, our checks have been firm around cloud cyber security, firewall refreshes, [privileged access management], endpoint, and vulnerability/threat management,” Ives explained, adding that rising threats are good for increased cyber security budgets.

The firm’s other favorite cyber security names include Palo Alto Networks (PANW), CyberArk (CYBR), Tenable (TENB) and Zscaler (ZS).

Last week, Morgan Stanley said cyber security companies were seen as “durable” going into earnings season, but noted that Check Point (CHKP) may have “difficult competitive dynamics,” given that more than 40% of the company’s revenue comes from Europe.