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Fortinet
(NASDAQ:FTNT)
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Rating:79Outperform
Price Target:
$185.00
▲(126.05% Upside)
Action:Reiterated
Date:06/17/26
FTNT scores well mainly on strong financial performance (high margins and strong free cash flow) and a very constructive earnings update with raised FY2026 outlook. Technicals are supportive but somewhat overextended (RSI/Stoch elevated), while the overall score is held back by a premium valuation (P/E ~56.5) and the noted watch items around services revenue conversion and ARR cadence.
Positive Factors
High margins and profitability
Fortinet's exceptionally high gross and operating margins reflect a software-heavy security platform and scalable delivery via subscriptions and appliances. Sustained margin levels support durable reinvestment in R&D, margin-accretive growth, and strong operating leverage across cycles.
Negative Factors
Services revenue conversion lag
A material gap between accelerating service billings and slower reported service revenue implies delayed recognition of recurring revenue and slower ARR uplift. This timing mismatch can reduce near-term revenue predictability and obscure the pace at which high-margin subscription revenue scales.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and profitability
Fortinet's exceptionally high gross and operating margins reflect a software-heavy security platform and scalable delivery via subscriptions and appliances. Sustained margin levels support durable reinvestment in R&D, margin-accretive growth, and strong operating leverage across cycles.
Read all positive factors
Fortinet Key Performance Indicators (KPIs)
Any
Gross Profit by Type
Shows profitability across different product lines or services, highlighting which areas are most lucrative and where Fortinet might focus for growth.
Shows profitability across different product lines or services, highlighting which areas are most lucrative and where Fortinet might focus for growth.
Data provided by:
The Fly
The FlyFortinet (FTNT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$117.80B
Dividend YieldN/A
Average Volume (3M)5.90M
Price to Earnings (P/E)62.2
Beta (1Y)1.19
Revenue Growth15.75%
EPS Growth6.24%
CountryUS
Employees15,109
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)2.60
Shares Outstanding732,648,400
10 Day Avg. Volume4,191,535
30 Day Avg. Volume5,896,913
Financial Highlights & Ratios
PEG Ratio4.64
Price to Book (P/B)47.68
Price to Sales (P/S)8.68
P/FCF Ratio26.51
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$120.38Price Target Upside47.09% Upside
Rating ConsensusHold
Number of Analyst Covering33
EPS Forecast (FY)3.15
Revenue Forecast (FY)$7.81B
Fortinet Business Overview & Revenue Model
Company Description
Fortinet, Inc. specializes in delivering extensive, unified, and automated cybersecurity solutions to a global clientele, encompassing the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. At its core, the company offers For...
How the Company Makes Money
Fortinet generates revenue primarily from (1) product sales and (2) security subscriptions and support/services attached to those products and its software offerings. Product revenue is largely driven by sales of FortiGate appliances and other har...
Fortinet Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operating and financial results with high billings (+31%), revenue (+20%), outsized product growth (+41%), record margins and free cash flow, and raised guidance—underscoring broad-based demand (OT, SASE, AI security) and clear market-share momentum. Noted challenges include a services revenue conversion lag, component cost pressures requiring cautious pricing assumptions, some remaining supply-chain timing uncertainty, and analyst questions around SASE ARR cadence. Overall, the positive operational and financial momentum and increased guidance substantially outweigh the manageable near-term risks.Positive Updates
Strong Billings Growth
Total billings grew 31% year-over-year to $2.09 billion, driven by broad strength across secure networking and unified SASE.
Negative Updates
Services Revenue Conversion Lag
Despite strong product growth (+41%) and service billings acceleration (+27%), service revenue growth was modest at 11% and management noted the conversion from deferred revenue/billings to reported services revenue takes time and should pick up in the second half.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Billings Growth
Total billings grew 31% year-over-year to $2.09 billion, driven by broad strength across secure networking and unified SASE.
Read all positive updates
Company Guidance
Fortinet reiterated and raised its 2026 outlook, guiding Q2 billings of $2.09–$2.19 billion (midpoint +20% YoY), Q2 revenue $1.83–$1.93 billion (midpoint +15%), Q2 non‑GAAP gross margin 79.5%–80.5%, Q2 non‑GAAP operating margin 33%–35%, Q2 non‑GAAP EPS $0.72–$0.76 (assumes 736–740 million shares), Q2 infrastructure investments of $50–$100 million, a non‑GAAP tax rate of 18% and Q2 cash taxes of $160–$180 million; for the full year they now expect billings of $8.8–$9.1 billion (midpoint +18%), revenue of $7.71–$7.87 billion (midpoint +15%), service revenue of $5.09–$5.15 billion (midpoint +12%), non‑GAAP gross margin 79%–81%, non‑GAAP operating margin 33%–36%, non‑GAAP EPS $3.10–$3.16 (assumes 743–749 million shares), full‑year infrastructure investments of $350–$550 million, an 18% non‑GAAP tax rate and cash taxes of $400–$450 million, while managing the second half on a quarter‑by‑quarter basis.Fortinet Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.11B | 6.80B | 5.96B | 5.30B | 4.42B | 3.34B |
| Gross Profit | 5.74B | 5.50B | 4.80B | 4.07B | 3.33B | 2.56B |
| EBITDA | 2.69B | 2.46B | 2.20B | 1.47B | 1.08B | 727.70M |
| Net Income | 1.95B | 1.85B | 1.75B | 1.15B | 857.30M | 606.80M |
Balance Sheet | ||||||
| Total Assets | 9.88B | 10.39B | 9.76B | 7.26B | 6.23B | 5.92B |
| Cash, Cash Equivalents and Short-Term Investments | 3.29B | 3.58B | 4.07B | 2.44B | 2.21B | 2.55B |
| Total Debt | 496.80M | 996.30M | 994.30M | 992.30M | 990.40M | 988.40M |
| Total Liabilities | 8.89B | 9.15B | 8.27B | 7.72B | 6.51B | 5.12B |
| Stockholders Equity | 989.70M | 1.24B | 1.49B | -463.40M | -281.60M | 781.70M |
Cash Flow | ||||||
| Free Cash Flow | 2.44B | 2.23B | 1.88B | 1.73B | 1.45B | 1.20B |
| Operating Cash Flow | 2.80B | 2.59B | 2.26B | 1.94B | 1.73B | 1.50B |
| Investing Cash Flow | -494.00M | -599.10M | -727.40M | -649.30M | 763.90M | -1.33B |
| Financing Cash Flow | -3.68B | -2.37B | -50.10M | -1.57B | -2.13B | 82.80M |
Fortinet Technical Analysis
Positive
81.84
Price Trends
141.84
Positive
112.11
Positive
97.06
Positive
Market Momentum
6.54
Positive
59.86
Neutral
55.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTNT, the sentiment is Positive. The current price of 81.84 is below the 20-day moving average (MA) of 156.11, below the 50-day MA of 141.84, and below the 200-day MA of 97.06, indicating a bullish trend. The MACD of 6.54 indicates Positive momentum. The RSI at 59.86 is Neutral, neither overbought nor oversold. The STOCH value of 55.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FTNT.
Fortinet Risk Analysis
Fortinet disclosed 62 risk factors in its most recent earnings report. Fortinet reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fortinet Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $288.50B | 301.41 | 6.30% | ― | 19.51% | -33.05% | |
79 Outperform | $117.80B | 62.16 | 155.65% | ― | 15.75% | 6.24% | |
75 Outperform | $207.48B | -4,275.37 | -0.58% | ― | 23.17% | 73.57% | |
72 Outperform | $432.22B | 37.07 | 25.14% | 2.09% | 9.21% | 25.97% | |
70 Outperform | $14.23B | 13.83 | 36.43% | ― | 5.84% | 27.53% | |
68 Neutral | $23.68B | -312.38 | -3.71% | ― | 24.61% | -91.58% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
FTNT
Fortinet
161.61
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51.12%
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Fortinet Corporate Events
Executive/Board ChangesShareholder Meetings
Fortinet Shareholders Back Board, Auditor and Executive Pay
Positive
Jun 16, 2026
At its Annual Meeting of Stockholders held on June 12, 2026, Fortinet, Inc. reported that holders of approximately 88.15% of its outstanding common stock were present in person or by proxy. Stockholders approved the election of nine directors, inc...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.