Why Fortinet Stock Is Soaring Today

Shares of Fortinet (NASDAQ: FTNT) jumped as much as 24.8% higher on Wendesday morning, boosted by a strong earnings report. By 10:30 a.m., the cybersecurity veteran's stock had backed down slightly to a 22.4% gain.

Fortinet's second quarter by the numbers

Fortinet's second-quarter revenue rose 11% year over year, landing at $1.43 billion. Product sales decreased by 4.4% while service revenues jumped 19.8% higher.

On the bottom line, adjusted earnings increased by 50% to $0.57 per diluted share. Free cash flow came in at $319 million, significantly below the year-ago reading of $438 million. The year-ago period included a $190 million deferral of cash tax payments; without that one-time tax effect, Fortinet's free cash flow would have risen by 28.6% year over year.

The revenue result was at the top of management's guidance for the second quarter while earnings came in well above the top end of the guidance range's top end at $0.41 per share. Fortinet also breezed past Wall Street's consensus estimates, which were set near the midpoint of management guidance.

The secret sauce in Fortinet's recipe for success

The chief driver of Fortinet's strong results was its popular FortiGate secure access service edge (SASE) service. This platform integrates security features with access to the global internet in a single, cloud-based service. Many network equipment and service providers offer similar tools nowadays, but Fortinet has earned a leading role thanks to its robust security and easy-to-use network management tools.

Wednesday's big jump made up for sluggish market action in the last three months. The stock isn't exactly cheap, trading at 32 times forward earnings estimates, but it looks affordable next to high-growth industry rivals such as Zscaler , Palo Alto Networks , and CrowdStrike . This stock deserves a second look if you're interested in a leading network security expert at a reasonable price.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Fortinet, Palo Alto Networks, and Zscaler. The Motley Fool has a disclosure policy .