The Sunnyvale, CA-based company provides cyber security solutions to enterprise, service providers and government organizations.
"Feedback from our 2015 fourth quarter checks for Fortinet was softer than expected, with channel partners indicating a slowdown in momentum," the firm said in an analyst note.
Although broader firewall checks by the firm did not indicate any material pull-forward of firewall refreshers, its channel partners said some of the "euphoric" buying seen in 2014 and the first half of 2015 may be over.
Firewall refresh activity should continue into 2016 and incremental opportunities such as internal firewalls will help demand, the firm noted.
However, customer discussions have begun moving beyond the firewall to adjacent areas, such as advanced threat detection sand new end-point security products, Deutsche Bank added.
Shares of Fortinet are dropping by 3.53% to $26.25 on Tuesday morning.
Separately, TheStreet Ratings Team has a "hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income.
As a counter to these strengths, TheStreet Ratings also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: FTNT