Deutsche Bank analyst Gray Powell upgraded Fortinet Inc. to "buy" from "hold," writing that the company has an "attractive" revenue and free cash flow growth profile relative to its valuation.

Powell wrote that the company, which currently holds over 10% share in network security, will keep gaining market share in the network security space.

He said investors "underappreciate" the subscription aspect of the company's growth story, pointing out that higher-margin subscription services would drive the bulk of revenue growth, which would benefit the company's operating margin profile.

The analyst said the company's free cash flow margins can "reasonably scale back" into the high 20% range by 2020, enabling it to translate a mid-teens revenue growth rate into a high-teens normalized free cash flow growth profile over the next few years.

He raised his price target for Fortinet to $48 from $36. His EPS estimates are 44 cents for 2017, 62 cents for 2018 and 89 cents for 2019.