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Fortinet
(NASDAQ:FTNT)
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Rating:78Outperform
Price Target:
$207.00
▲(34.71% Upside)
Action:Reiterated
Date:08/05/26
FTNT scores well primarily on strong financial performance (very high margins and accelerating free cash flow) and a very positive earnings call with raised guidance and record profitability. These strengths are partly offset by a high valuation (P/E ~56.6) and limited technical-analysis evidence due to missing indicator data, plus a fundamental watch item around slower recent TTM revenue growth and services growth lagging product momentum.
Positive Factors
High-margin profitability
Fortinet’s very high gross, operating, and net margins demonstrate a profitable business model with meaningful operating leverage. Sustaining these margins provides resources to fund product development, infrastructure investment, customer acquisition, and shareholder returns while supporting resilience through normal demand cycles.
Negative Factors
Recent revenue growth slowdown
The recent deceleration in total revenue growth shows that Fortinet’s strong scale and profitability have not eliminated the challenge of maintaining prior expansion rates. If slower growth persists, it could limit operating leverage, reduce the pace of market-share gains, and make future earnings growth more dependent on margins.
Read all positive and negative factors
Positive Factors
Negative Factors
High-margin profitability
Fortinet’s very high gross, operating, and net margins demonstrate a profitable business model with meaningful operating leverage. Sustaining these margins provides resources to fund product development, infrastructure investment, customer acquisition, and shareholder returns while supporting resilience through normal demand 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
$124.09B
Dividend YieldN/A
Average Volume (3M)3.76M
Price to Earnings (P/E)59.1
Beta (1Y)1.30
Revenue Growth18.77%
EPS Growth12.93%
CountryUS
Employees15,472
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)2.86
Shares Outstanding733,713,600
10 Day Avg. Volume3,634,611
30 Day Avg. Volume3,755,946
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 Cap0.89
Enterprise Value/Revenue14.63
Enterprise Value/Gross Profit18.20
Enterprise Value/Ebitda39.33
Forecast
1Y Price Target
$176.71Price Target Upside15.00% Upside
Rating ConsensusHold
Number of Analyst Covering32
EPS Forecast (FY)3.45
Revenue Forecast (FY)$8.12B
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 primarily makes money by selling cybersecurity products and associated services.
1) Product revenue (hardware and software): A significant portion of Fortinet’s revenue comes from selling its security and networking products, most notabl...
Fortinet Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operational and financial momentum: double-digit growth across top-line metrics, a 52% jump in product revenue, record non-GAAP operating margin (38%), and exceptional free cash flow that supported increased guidance and continued buybacks. Management highlighted durable secular drivers (AI, sovereign SASE, OT security) and product differentiation (FortiOS, FortiASIC). Principal caveats were a still-lagging services growth rate, some uncertainty around how sustained ultra-high product growth will be into 2027, and modeling complexity from mixed metric definitions and price/headwind adjustments. On balance the positives — outsized product growth, margin expansion, cash generation, large customer wins and upgraded guidance — significantly outweigh the lowlights.Positive Updates
Billings and Revenue Acceleration
Total billings grew 33% year-over-year to $2.37 billion; total revenue increased 26% year-over-year to $2.05 billion, exceeding the high end of guidance for the quarter.
Negative Updates
Services Revenue Growth Lagging Product Strength
Service revenue grew 14% YoY to $1.27 billion, materially lagging product revenue growth (52%); management described services revenue as having troughed but service growth remains a relative weakness versus product.
Read all updates
Q2-2026 Updates
Positive
Negative
Billings and Revenue Acceleration
Total billings grew 33% year-over-year to $2.37 billion; total revenue increased 26% year-over-year to $2.05 billion, exceeding the high end of guidance for the quarter.
Read all positive updates
Company Guidance
Fortinet raised its outlook, guiding Q3 billings of $2.25–$2.35 billion (midpoint +27% y/y) and revenue of $2.01–$2.10 billion (midpoint +19% y/y), with non‑GAAP gross margin of 79–81%, non‑GAAP operating margin of 35–37%, non‑GAAP EPS of $0.83–$0.87 (assumes 741–745M shares), infrastructure investments of $100–$150M, a non‑GAAP tax rate of 18% and cash taxes of $100–$130M; full‑year guidance was raised to billings $9.35–$9.55B (midpoint +25%), revenue $8.02–$8.18B (midpoint +19%), service revenue $5.18–$5.22B (midpoint +14%), full‑year non‑GAAP gross margin 79–81%, non‑GAAP operating margin 35–37%, non‑GAAP EPS $3.41–$3.47 (741–745M shares), infrastructure investments $350–$550M and cash taxes $400–$450M, with management noting service revenue growth should pick up in H2 and that they will manage the remainder of the year quarter‑by‑quarter.Fortinet Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
70
Positive
Cash Flow
92
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.53B | 6.80B | 5.96B | 5.30B | 4.42B | 3.34B |
| Gross Profit | 6.05B | 5.50B | 4.80B | 4.07B | 3.33B | 2.56B |
| EBITDA | 2.80B | 2.46B | 2.20B | 1.47B | 1.08B | 727.70M |
| Net Income | 2.12B | 1.85B | 1.75B | 1.15B | 857.30M | 606.80M |
Balance Sheet | ||||||
| Total Assets | 10.86B | 10.39B | 9.76B | 7.26B | 6.23B | 5.92B |
| Cash, Cash Equivalents and Short-Term Investments | 4.07B | 3.58B | 4.07B | 2.44B | 2.21B | 2.55B |
| Total Debt | 496.90M | 996.30M | 994.30M | 992.30M | 990.40M | 988.40M |
| Total Liabilities | 9.31B | 9.15B | 8.27B | 7.72B | 6.51B | 5.12B |
| Stockholders Equity | 1.55B | 1.24B | 1.49B | -463.40M | -281.60M | 781.70M |
Cash Flow | ||||||
| Free Cash Flow | 3.12B | 2.23B | 1.88B | 1.73B | 1.45B | 1.20B |
| Operating Cash Flow | 3.40B | 2.59B | 2.26B | 1.94B | 1.73B | 1.50B |
| Investing Cash Flow | -412.40M | -599.10M | -727.40M | -649.30M | 763.90M | -1.33B |
| Financing Cash Flow | -3.42B | -2.37B | -50.10M | -1.57B | -2.13B | 82.80M |
Fortinet Technical Analysis
Neutral
153.66
Price Trends
169.63
Positive
161.25
Positive
124.33
Positive
Market Momentum
2.84
Positive
43.42
Neutral
14.26
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTNT, the sentiment is Neutral. The current price of 153.66 is below the 20-day moving average (MA) of 181.73, below the 50-day MA of 169.63, and above the 200-day MA of 124.33, indicating a neutral trend. The MACD of 2.84 indicates Positive momentum. The RSI at 43.42 is Neutral, neither overbought nor oversold. The STOCH value of 14.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | $232.83B | 6,459.94 | 1.29% | ― | 24.30% | ― | |
78 Outperform | $124.09B | 59.14 | 187.95% | ― | 18.77% | 12.93% | |
72 Outperform | $14.08B | 13.93 | 36.43% | ― | 4.64% | 25.51% | |
70 Outperform | $279.76B | 743.48 | 1.68% | ― | 24.49% | -68.55% | |
65 Neutral | $33.81B | -531.74 | -2.76% | ― | 25.42% | -47.39% | |
62 Neutral | $7.76B | -10.05 | -434.99% | ― | 30.40% | -124.09% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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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.