Again today, we see why this is, suddenly, such a hard market. Tonight Fortinet (FTNT) , a very good cybersecurity firm, pre-announced some disappointing numbers. It wasn't disastrous: $311 million to $316 million in revenues when the Street was looking for $322 million, but this has been one of the strongest areas of tech, so it's a very big deal.
The cause? Company CEO Ken Xie cited "the lengthening of deal cycles." Why is that? "Enterprises are becoming more strategic with their purchasing decisions and buying with less urgency than last year." While the company remains "confident in the underlying strength" of its business and "long-term growth opportunity," it's pretty stunning, although the company did cite some poor sales execution issues in North America and macro issues in Latin America and the U.K. (Fortinet is part of TheStreet's Growth Seeker portfolio.)
Now the reason why this is so stunning is that last week I had two other cybersecurity standouts, Proofpoint (PFPT) and Palo Alto Networks (PANW) , and, literally, they both told me that business was very strong and they saw big tailwinds for their cybersecurity wares. If you had watched either interview or both, you would have thought Fortinet was killing it, not getting killed by it.
Now I don't think either Proofpoint or Palo Alto is making statements that they can't back up. Just the opposite; these are conservative companies.
That said, do you think anyone will bother to distinguish among these, especially when many of them trade in the PureFunds ISE Cybersecurity ETF, or HACK as it is known.
So it goes: A red-hot area last week turns stone cold just a handful of days after hearing fabulous stories of momentum no matter what the environment.
That's just plain treacherous.