as cloudsoftware valuations have been slashed this year cybersecurity stocks have been the safest play in the sector but they have been slammed this week and thursday’s decline seemed to stem from just one poor forecast fortinet inc ftnt guided for fourthquarter billings wednesday afternoon that undershot analysts’ expectations sending shares plunging by a doubledigit percentage in thursday’s action in a conference call executives described a stall in completing deals especially big ones as companies take care with spending a common theme in other software sectors this year but not in cybersecurity which has largely been seen as a necessity that would avoid budget discussions “as part of the q4 guidance setting process we considered several factors including the greater macro uncertainty today and with it the increased risk of forecasting the timing of certain larger transactions and the transition to more normalized customer buying behaviors which means there is less of an emphasis on ordering to get a place in line” fortinet chief financial officer keith jensen said in a call fortinet stock plunged as much as 20 in morning trading thursday before pulling back to losses closer to 12 and cybersecurity etfs were headed for their second worst week of the year as larger cybersecurity companies also took a hit palo alto networks inc panw shares dropped as much as 96 and zscaler inc zs more than 6 thursday as analysts showed concerns about big deals closing shares of cisco systems inc csco were down 2 at last check while shares of crowdstrike holdings inc crwd were off 25 fortinet is looking to compete with those and other vendors for bigger contracts and a slowdown on those deals could signal a slowdown for cybersecurity competitors who will not report earnings for at least a couple of weeks cisco reports its earnings nov 16 palo alto networks is scheduled to report nov 17 crowdstrike is scheduled for nov 29 and zscaler is expected to report in early december “as fortinet has started to move upmarket the company is participating in larger deals in the seven and eightfigure range that are facing additional scrutiny in a challenging macro environment” wrote william blair analyst jonathan ho who has an outperform rating on fortinet mizuho analyst gregg moskowitz called the stock reaction “overblown” though noting that the company did not supply formal bookings and backlog figures now that “customers are now returning towards more normalized spending behavior vs expedited purchasing decisions that had been driven by supply chain constraints” moskowitz has a buy rating on fortinet the problem could also be more about fortinet than the larger sector as wells fargo analysts pointed out that the company was having an issue with “the productivity of recently hired sales reps” which caused them to be conservative about the ability to close deals in the holiday quarter executives “said sales reps with less than one year of experience now make up 30 of the total sales force” the analysts wrote while maintaining an overweight rating and 70 price target “as such management is not factoring the normal q4 budget flush this year” while this earnings season has been rife with fear that businesses are cutting back on capital spending because of a looming recession analysts have said companies are unlikely to scale back as much on cybersecurity given the amount of negative exposure generated when a company gets locked out of its own data by ransomware so even while cybersecurity stocks were heading for their worst week in six months they have been still the least scathed of cloudsoftware stocks on the year the etfmg prime cyber security etf hack fell more than 2 thursday putting the etf down 7 for the week and on track for its secondworst week this year after a 76 decline for the week ending may 6 the first trust nasdaq cybersecurity etf cibr fell more than 25 thursday putting it on track for a 79 decline its worst since an 82 drop that same week in comparison the ishares expanded techsoftware sector etf igv  which was down 14 thursday was off 77 so far this week and has had two worse weeks this year similarly the first trust cloud computing etf skyy  which was down 1 thursday and off 74 for the week so far has had three other 7plus down weeks this year in fact yeartodate cybersecurity is holding up the best when it comes to software year to date while the hack is down 29 and the cibr is off 27 the igv is down 38 while the skyy has fallen 43 that’s compared with a 22 drop on the sp 500 index spx and a 33 fall of the techheavy nasdaq composite index comp  at least 12 of the 31 analysts fortinet analysts that factset tracks trimmed their price targets in reaction to the earnings leaving the average at 6585 thursday more than 40 higher than the going rate factset reports that 25 of the 31 analysts rate the stock the equivalent of a buy while the other six rate it a hold