(Updates with recent stock movement, Rosenblatt downgrade in the headline and first two paragraphs.)

Fortinet (FTNT) shares were down over 25% in recent Thursday trading after Rosenblatt and Morgan Stanley downgraded the cybersecurity company's stock.

Rosenblatt downgraded the stock to neutral from buy and cut its price target to $85 from $125.

The company's anticipated firewall refresh cycle is about 40% to 50% complete and no longer remains a near-term catalyst, Morgan Stanley said in a note on Thursday.

The discrepancy between Fortinet's previous analyst day forecast and the actual pace of firewall replacements raised concerns and once the company "cleaned up their estimates, there was a smaller opportunity than they had thought," the firm noted.

The company's free cash flow fell short of expectations, primarily due to $144 million in real estate investment, while subscriptions and services revenue growth also missed estimates due to slower conversion of billings and a less extensive upsell tied to the refresh, according to the note.

Morgan Stanley said that increased sales headcount, acquisition absorption, and foreign exchange headwinds contributed to the margin contraction, signaling rising costs that might weigh on future earnings.

Morgan Stanley downgraded its rating to equalweight from overweight and reduced the price target to $78 from $110.

Price: 72.19, Change: -24.39, Percent Change: -25.25