Fortinet (FTNT) AI Stock Analysis

• Market Cap: $60.00B
• Dividend Yield: N/A
• Average Volume (3M): 6.87M
• Price to Earnings (P/E): 33.7
• Beta (1Y): 1.24
• Revenue Growth: 14.78%
• EPS Growth: 22.52%
• Country: US
• Employees: 14,556
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.81
• Shares Outstanding: 743,648,130
• 10 Day Avg. Volume: 6,484,336
• 30 Day Avg. Volume: 6,872,547
• PEG Ratio: 4.54
• Price to Book (P/B): 47.68
• Price to Sales (P/S): 8.68
• P/FCF Ratio: 26.51
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 8.30
• Enterprise Value/Gross Profit: 10.27
• Enterprise Value/Ebitda: 23.29
• 1Y Price Target: $88.77
• Price Target Upside: 10.96% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 26
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $88.00 ▲(10.00% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

FTNT scores well primarily due to strong profitability and free-cash-flow generation, reinforced by upbeat 2026 guidance and strong execution highlights from the earnings call. The score is held back by a weak technical trend (below key moving averages), a mid-range valuation multiple (P/E ~32.5 with no dividend yield), and balance-sheet variability with higher recent leverage alongside slowing recent growth.

Positive Factors

High gross & operating margins

Sustained very high gross margins and a stepped-up operating margin provide durable profitability levers: they fund continued R&D, sales expansion and infrastructure investment, support pricing flexibility versus peers, and make the business resilient across cycles and capital needs.

Strong free cash flow generation

Large, consistent free cash flow and high conversion rates create lasting financial optionality: enables buybacks, targeted capex for cloud/SASE, debt management and M&A, while reducing reliance on external financing and supporting investment in long-term product leadership.

Market leadership & SASE/product acceleration

Strong product acceleration and rapid SASE adoption indicate structural market share gains and platform leverage: growing ARR and large deals expand sticky recurring revenue, increase cross-sell into networking base, and position Fortinet to sustain higher long-term billings and customer retention.

Negative Factors

Slowing revenue growth

Marked deceleration in revenue growth reduces the pace of scale benefits and challenges sustaining historic operating leverage. Over the medium term, slower top-line expansion heightens reliance on margin improvement and cash returns to maintain profitability per share growth.

Rising leverage and balance-sheet variability

Material increase in leverage and volatile equity levels constrain financial flexibility and increase interest and refinancing risk, especially with large maturities. Balance-sheet swings reduce room for aggressive M&A or defensive spending during downturns.

Services revenue lag & billings volatility

Delayed conversion of product billings into services slows steady recurring revenue growth and weakens predictability of cashflows. Persistent billings volatility (e.g., SecOps) complicates forecasting, weakens subscription stickiness, and may pressure long-run margin stability.

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 security hardware, software licenses, and subscription services. Its key revenue streams include the sale of FortiGate firewalls and other security appliances, which provide essential network security functions. Additionally, Fortinet earns recurring revenue through subscription services for threat intelligence, security updates, and support services. The company also engages in partnerships with technology and service providers to enhance its market reach and product offerings, contributing to its earnings through joint ventures and collaborative sales efforts. Furthermore, the increasing demand for cloud security solutions and managed security services in the face of rising cyber threats has bolstered its revenue potential.

Fortinet Financial Statement Overview

Summary

Strong profitability and cash generation support a high score: gross margins ~75–81%, operating margin up to ~35% (TTM), and free cash flow ~$2.23B with solid conversion (~83–89% of net income). The main offsets are slowing revenue growth (~12% in 2024 and ~4% in TTM) and a middling balance sheet profile with rising leverage (debt-to-equity ~1.35 in TTM) and equity volatility.

Income Statement

FTNT shows strong and improving profitability with very high gross margins (~75% to ~81%) and a step-up in operating performance (operating margin rising from ~19% in 2021 to ~35% in TTM (Trailing-Twelve-Months)). Net margin is also robust (~29% in 2024; ~29% in TTM). The main weakness is growth deceleration: revenue growth slowed meaningfully from ~20–32% (2021–2023) to ~12% (2024) and ~4% in TTM, which can pressure valuation and future operating leverage.

Balance Sheet

Leverage is moderate in the most recent periods, with debt-to-equity moving up to ~1.35 in TTM (Trailing-Twelve-Months) from ~0.67 in 2024, alongside declining equity ($1.49B in 2024 to $1.24B in TTM). Earlier years also show volatility, including negative equity in 2022–2023, which highlights balance-sheet variability. Offsetting this, the company is highly profitable relative to equity in recent periods (very high return on equity), but the combination of equity swings and rising leverage keeps the balance-sheet score in the middle of the range.

Cash Flow

Cash generation is a clear strength: operating cash flow and free cash flow are large and growing, with free cash flow up ~10% in TTM (Trailing-Twelve-Months) and reaching ~$2.23B. Free cash flow conversion is solid, running at ~83–89% of net income across the periods provided, indicating earnings are translating well into cash. The main drawback is that operating cash flow relative to revenue is only around ~51–65% depending on the year (as provided), and it dipped in TTM versus 2024, suggesting some working-capital or timing headwinds despite strong absolute cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.80B	5.96B	5.30B	4.42B	3.34B
Gross Profit	5.50B	4.80B	4.07B	3.33B	2.56B
EBITDA	2.42B	2.20B	1.47B	1.08B	727.70M
Net Income	1.85B	1.75B	1.15B	857.30M	606.80M
Balance Sheet
Total Assets	10.39B	9.76B	7.26B	6.23B	5.92B
Cash, Cash Equivalents and Short-Term Investments	3.58B	4.07B	2.44B	2.21B	2.55B
Total Debt	996.30M	994.30M	992.30M	990.40M	988.40M
Total Liabilities	9.15B	8.27B	7.72B	6.51B	5.12B
Stockholders Equity	1.24B	1.49B	-463.40M	-281.60M	781.70M
Cash Flow
Free Cash Flow	2.23B	1.88B	1.73B	1.45B	1.20B
Operating Cash Flow	2.59B	2.26B	1.94B	1.73B	1.50B
Investing Cash Flow	-599.10M	-727.40M	-649.30M	763.90M	-1.33B
Financing Cash Flow	-2.37B	-50.10M	-1.57B	-2.13B	82.80M

Fortinet Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 80.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 80 is below the 20-day moving average (MA) of 82.39, below the 50-day MA of 80.64, and below the 200-day MA of 88.32, indicating a bearish trend. The MACD of 0.55 indicates Positive momentum. The RSI at 46.17 is Neutral, neither overbought nor oversold. The STOCH value of 25.38 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
CSCO	74 Outperform	$308.80B	27.50	24.34%	2.09%	8.91%	14.53%
FTNT	72 Outperform	$60.00B	33.66	135.72%	―	14.78%	22.52%
PANW	72 Outperform	$124.32B	83.55	16.26%	―	15.30%	-60.71%
CHKP	69 Neutral	$17.61B	16.51	37.27%	―	6.31%	25.27%
ZS	62 Neutral	$27.45B	-644.02	-2.41%	―	23.24%	-8.83%
CRWD	62 Neutral	$104.81B	―	-8.88%	―	22.05%	-341.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%