Needham analyst Mike Cikos has maintained their neutral stance on FTNT stock, giving a Hold rating today.
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Mike Cikos has given his Hold rating due to a combination of factors impacting Fortinet’s stock outlook. Despite Fortinet reporting second-quarter billings and revenue that surpassed expectations, the company’s maintained revenue guidance for CY25, with a notable shift towards product sales, raises some concerns. Additionally, management’s indication that the CY26 upgrade cycle is about 40%-50% complete suggests potential challenges in sustaining growth momentum.
Given the significant size of the CY26 cohort, which includes approximately 650,000 firewall units and higher-tier models, compared to the smaller CY27 cohort, investors are closely evaluating Fortinet’s ability to maintain robust revenue growth beyond the current refresh cycle. The market is particularly interested in understanding how the company plans to achieve a compound annual growth rate of 12% or more in billings over the next three to five years.