Fortinet (FTNT) AI Stock Analysis

• Market Cap: $64.06B
• Dividend Yield: N/A
• Average Volume (3M): 8.34M
• Price to Earnings (P/E): 33.4
• Beta (1Y): 1.07
• Revenue Growth: 14.46%
• EPS Growth: 48.06%
• Country: US
• Employees: 14,556
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.64
• Shares Outstanding: 766,266,050
• 10 Day Avg. Volume: 7,355,461
• 30 Day Avg. Volume: 8,336,512
• 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: 1.22
• Enterprise Value/Revenue: 12.33
• Enterprise Value/Gross Profit: 15.12
• Enterprise Value/Ebitda: 32.53
• 1Y Price Target: $87.15
• Price Target Upside: 4.74% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 35

• Rating: 67 Neutral
• Price Target: $84.00 ▲(0.95% 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

Strong Financial Performance

Exceeding billing and margin guidance indicates robust demand and operational efficiency, supporting long-term revenue and profit growth.

AI and Innovation

Investment in AI and new solutions enhances Fortinet's competitive edge, driving innovation and long-term market leadership in cybersecurity.

Expansion in Large Enterprises

Growth in large enterprise deals signifies strong market position and ability to secure high-value contracts, boosting future revenue streams.

Negative Factors

Service Revenue Growth Deceleration

Decelerating service revenue growth may indicate challenges in maintaining subscription momentum, impacting long-term recurring revenue.

Operating Margin Decline

A decline in operating margin suggests rising costs and potential inefficiencies, which could pressure profitability if not addressed.

Flat Sequential Growth in Unified SASE

Flat sequential growth in a key segment like Unified SASE may signal saturation or competitive pressures, affecting future growth prospects.

Fortinet Business Overview & Revenue Model

Company Description

Fortinet (FTNT) is a global cybersecurity company that provides broad, integrated, and high-performance security solutions across the IT infrastructure. Founded in 2000, Fortinet offers a range of products and services, including firewalls, intrusion prevention systems, antivirus software, and secure access solutions. The company serves various sectors, including enterprises, service providers, and government organizations, helping them protect their networks, data, and applications from cyber threats.

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: Neutral
• Last Price: 83.21
• 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 Neutral. The current price of 83.21 is above the 20-day moving average (MA) of 80.52, below the 50-day MA of 86.30, and below the 200-day MA of 97.21, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 52.18 is Neutral, neither overbought nor oversold. The STOCH value of 68.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FTNT.

Fortinet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PANW	80 Outperform	134.25B	126.37	14.49%	―	14.87%	-57.43%
CHKP	76 Outperform	22.04B	26.54	―	―	6.27%	7.14%
FTNT	67 Neutral	$64.06B	33.36	165.17%	―	14.46%	48.06%
CYBR	67 Neutral	23.95B	-142.32	-3.94%	―	39.45%	-982.51%
ZS	67 Neutral	45.02B	-1,068.83	-2.31%	―	23.31%	31.04%
CRWD	66 Neutral	119.54B	-395.36	-7.91%	―	23.46%	-270.07%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.