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Fortinet
(NASDAQ:FTNT)
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Rating:79Outperform
Price Target:
$171.00
▲(108.94% 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 Profitability
Sustained very high gross and operating margins reflect strong pricing power, efficient product/software mix and scale in security services. Durable margin structure supports reinvestment, high returns on incremental revenue and insulation versus cyclical hardware pricing swings.
Negative Factors
Services Revenue Conversion Lag
A lag between accelerated service billings and reported services revenue slows the maturation of recurring revenue and ARR visibility. Persistent conversion delays can compress near-term recurring margin expansion and make revenue cadence less predictable for planning.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability
Sustained very high gross and operating margins reflect strong pricing power, efficient product/software mix and scale in security services. Durable margin structure supports reinvestment, high returns on incremental revenue and insulation versus cyclical hardware pricing swings.
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
$110.89B
Dividend YieldN/A
Average Volume (3M)7.16M
Price to Earnings (P/E)59.8
Beta (1Y)1.19
Revenue Growth15.75%
EPS Growth6.24%
CountryUS
Employees14,556
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)2.60
Shares Outstanding732,648,400
10 Day Avg. Volume7,505,947
30 Day Avg. Volume7,163,766
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 Cap0.94
Enterprise Value/Revenue14.61
Enterprise Value/Gross Profit18.11
Enterprise Value/Ebitda38.63
Forecast
1Y Price Target
$112.69Price Target Upside37.70% Upside
Rating ConsensusHold
Number of Analyst Covering34
EPS Forecast (FY)3.15
Revenue Forecast (FY)$7.80B
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 related services, with revenue generally split between product revenue and services revenue. Product revenue is generated mainly from sales of FortiGate hardware appliances and o...
Fortinet Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 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
120.96
Positive
101.24
Positive
91.63
Positive
Market Momentum
7.18
Positive
67.60
Neutral
76.85
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 145.59, below the 50-day MA of 120.96, and below the 200-day MA of 91.63, indicating a bullish trend. The MACD of 7.18 indicates Positive momentum. The RSI at 67.60 is Neutral, neither overbought nor oversold. The STOCH value of 76.85 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 | $247.92B | 278.99 | 6.30% | ― | 19.51% | -33.05% | |
79 Outperform | $110.89B | 59.78 | 155.65% | ― | 15.75% | 6.24% | |
76 Outperform | $178.47B | -3,910.05 | -0.58% | ― | 23.17% | 73.54% | |
72 Outperform | $448.42B | 38.97 | 25.14% | 2.09% | 9.21% | 25.97% | |
70 Outperform | $13.56B | 12.99 | 36.43% | ― | 5.84% | 27.53% | |
68 Neutral | $21.39B | -286.67 | -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
153.62
51.19
49.98%
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131.43
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PANW
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341.02
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72.60%
ZS
Zscaler
141.15
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CRWD
CrowdStrike Holdings
763.14
271.07
55.09%
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.