Fortinet (FTNT) AI Stock Analysis

• Market Cap: $60.36B
• Dividend Yield: N/A
• Average Volume (3M): 8.86M
• Price to Earnings (P/E): 30.7
• Beta (1Y): 1.05
• Revenue Growth: 14.46%
• EPS Growth: 48.06%
• Country: US
• Employees: 14,556
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Infrastructure
• EPS (TTM): 0.64
• Shares Outstanding: 766,266,050
• 10 Day Avg. Volume: 8,415,309
• 30 Day Avg. Volume: 8,862,094
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 12.33
• Enterprise Value/Gross Profit: 15.12
• Enterprise Value/Ebitda: 32.53
• 1Y Price Target: $87.27
• Price Target Upside: 13.96% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 35

• Rating: 67 Neutral
• Price Target: $84.00 ▲(9.69% Upside)

Fortinet's strong financial performance and positive earnings call outlook are offset by bearish technical indicators and a relatively high valuation. The company's robust profitability and strategic growth initiatives in AI and cloud services position it well for future growth, but current market sentiment and valuation concerns weigh on the overall score.

Positive Factors

Market Positioning

Fortinet is well positioned to consolidate wallet share in the convergence of security and networking, evidenced by its new position in the Gartner MQ for SASE.

Product Expansion

FTNT is continuing to see success in attaching additional products into their installed base and has shown traction with US sales expansion and upsell of SASE/SecOps products.

Revenue Growth

Fortinet is increasingly emphasizing technology-driven upgrades and cross-sell as drivers of company revenue growth.

Negative Factors

Estimates and Valuation Pressure

Street estimates for future growth are expected to come down further, likely putting pressure on the stock on a relative basis.

Firewall Refresh Challenges

The firewall refresh is turning out to be smaller than expected, which may lead to a decrease in FY26/FY27 estimates, creating a headwind for the stock.

Valuation Concerns

With FTNT down 17% YTD, the risk might already be priced in, but the current valuation suggests a more negative near-term risk-reward outlook.

Fortinet Business Overview & Revenue Model

Company Description

Fortinet, Inc. provides broad, integrated, and automated cybersecurity solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers FortiGate hardware and software licenses that provide various security and networking functions, including firewall, intrusion prevention, anti-malware, virtual private network, application control, web filtering, anti-spam, and wide area network acceleration. The company also provides FortiSwitch product family that offers secure switching solutions for connecting customers their end devices; FortiAP product family, which provides secure wireless networking solutions; FortiExtender, a hardware appliance; FortiAnalyzer product family, which offers centralized network logging, analyzing, and reporting solutions; and FortiManager product family that provides central and scalable management solution for its FortiGate products. It offers FortiWeb product family provides web application firewall solutions; FortiMail product family that secure email gateway solutions; FortiSandbox technology that delivers proactive detection and mitigation services; FortiClient that provides endpoint protection with pattern-based anti-malware, behavior-based exploit protection, web-filtering, and an application firewall; FortiToken and FortiAuthenticator product families for multi-factor authentication to safeguard systems, assets, and data; and FortiEDR/XDR, an endpoint protection solution that provides both comprehensive machine-learning anti-malware execution and real-time post-infection protection. It provides security subscription, technical support, professional, and training services. It sells its security solutions to channel partners and directly to various customers in telecommunications, technology, government, financial services, education, retail, manufacturing, and healthcare industries. It has strategic alliance with Linksys. Fortinet, Inc. was incorporated in 2000 and is headquartered in Sunnyvale, California.

How the Company Makes Money

Fortinet generates revenue primarily through the sale of its cybersecurity products and subscription services. Its revenue model includes a mix of software, hardware, and services, with significant earnings coming from subscriptions and support services that provide ongoing security updates and technical assistance. Key revenue streams include the sale of FortiGate firewalls, which are central to its portfolio, along with cloud security solutions and endpoint protection. Additionally, Fortinet has established strategic partnerships with major technology providers and distributors, enhancing its market reach and driving further sales. The company's focus on offering integrated security solutions across various environments, including on-premises and cloud, contributes significantly to its recurring revenue and overall financial performance.

Fortinet Financial Statement Overview

Summary

Fortinet demonstrates strong financial performance with high profitability margins and robust revenue growth. The balance sheet has improved with positive equity, although the debt-to-equity ratio remains a concern. Cash flow generation is efficient, supporting overall financial health.

Income Statement

Fortinet demonstrates strong financial performance with high gross profit margins at 80.57% and significant net profit margins at 29.30% for TTM. Revenue growth rate of 12.27% from the previous year is robust, contributing to overall profitability. EBIT and EBITDA margins are also strong at 30.24% and 34.40% respectively, indicating efficient operational management.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio due to negative equity in previous years, though it has improved to a positive equity of $1.49 billion recently. Return on Equity (ROE) is not calculable due to negative equity in earlier periods, but positive current equity suggests improved financial health. The equity ratio is 15.30%, indicating limited equity financing relative to assets.

Cash Flow

Fortinet's cash flow is strong, with a free cash flow growth rate of 8.54% and a high operating cash flow to net income ratio of 1.29 for TTM, indicating solid cash generation. The free cash flow to net income ratio is 1.08, showing an efficient translation of net income into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.34B	5.96B	5.30B	4.42B	3.34B	2.59B
Gross Profit	5.17B	4.80B	4.07B	3.33B	2.56B	2.02B
EBITDA	2.40B	2.20B	1.47B	1.08B	727.70M	610.50M
Net Income	1.94B	1.75B	1.15B	857.30M	606.80M	488.50M
Balance Sheet
Total Assets	10.64B	9.76B	7.26B	6.23B	5.92B	4.04B
Cash, Cash Equivalents and Short-Term Investments	4.56B	4.07B	2.44B	2.21B	2.55B	1.84B
Total Debt	995.30M	994.30M	992.30M	990.40M	988.40M	0.00
Total Liabilities	8.58B	8.27B	7.72B	6.51B	5.12B	3.19B
Stockholders Equity	2.06B	1.49B	-463.40M	-281.60M	781.70M	856.00M
Cash Flow
Free Cash Flow	2.03B	1.88B	1.73B	1.45B	1.20B	957.80M
Operating Cash Flow	2.40B	2.26B	1.94B	1.73B	1.50B	1.08B
Investing Cash Flow	-784.00M	-727.40M	-649.30M	763.90M	-1.33B	-72.80M
Financing Cash Flow	-452.70M	-50.10M	-1.57B	-2.13B	82.80M	-1.17B

Fortinet Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 76.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTNT, the sentiment is Negative. The current price of 76.58 is below the 20-day moving average (MA) of 78.81, below the 50-day MA of 93.60, and below the 200-day MA of 98.29, indicating a bearish trend. The MACD of -4.66 indicates Negative momentum. The RSI at 33.98 is Neutral, neither overbought nor oversold. The STOCH value of 35.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FTNT.

Fortinet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PANW	80 Outperform	$127.17B	119.07	17.45%	―	14.87%	-57.43%
CHKP	76 Outperform	$20.61B	24.96	30.30%	―	6.27%	7.14%
ZS	68 Neutral	$43.14B	―	-2.70%	―	23.31%	31.04%
FTNT	67 Neutral	$60.36B	30.70	165.17%	―	14.46%	48.06%
CRWD	65 Neutral	$103.77B	721.64	-8.99%	―	23.46%	-270.07%
Sector *	61 Neutral	$35.09B	8.26	-10.58%	1.90%	8.56%	-9.51%
GDDY	59 Neutral	$19.99B	25.57	288.03%	―	8.09%	-54.94%

Fortinet Corporate Events

Fortinet Expands Share Buyback Program by $1 Billion

On August 21, 2025, Fortinet‘s Board of Directors authorized a $1 billion increase in its share repurchase program, bringing the total authorized amount to $9.25 billion, and extended the program to February 28, 2027. This move allows Fortinet flexibility in managing its capital structure and potentially enhances shareholder value, with repurchases dependent on market conditions and other factors.

Fortinet Elects Board and Retains Deloitte as Auditor

At the Annual Meeting of Stockholders held on June 13, 2025, Fortinet, Inc. successfully elected nine directors to its Board for a one-year term, ratified Deloitte & Touche LLP as its independent accounting firm, and held an advisory vote on executive compensation. However, a stockholder proposal to separate the roles of Chairman and CEO was not approved. These decisions reflect Fortinet’s current governance structure and strategic direction, impacting its leadership and operational oversight.