One-glance verdict
Overvalued
$104.07 our estimate vs market $166.83
Wall Street consensus: $116.76 (12.2% higher than our fair-value estimate)
60% above our estimate, beyond the bull case
Fundamentals snapshot
Fortinet, Inc.
FTNT · NMS · Technology · Software - Infrastructure
Current price
$166.83
52-week range
$70.12 - $167.27
Market cap
$122.23B
Balance sheet
Healthy
103.72x Strong cushion
Net cash $2.73B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 4.6% last year.
- Reward Returns 132.4% on equity, ahead of 83% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 54.2% above its 5-year average P/E.
What this company does
Fortinet, Inc.
Fortinet sells cybersecurity products and services, acting like a digital security guard for a company's computer networks to protect them from hackers. A large part of its business comes from selling ongoing subscriptions for these security services, which creates predictable recurring revenue (income that comes in regularly, like a Netflix subscription). As more business is done online, the need to protect sensitive digital information grows, which increases demand for Fortinet's offerings.
How the company got here
Founded in 2000 by brothers Ken and Michael Xie, Fortinet started with the idea of combining different types of security protection into a single, easy-to-use device. Their first product, the FortiGate firewall, was a physical box that businesses could plug into their computer networks to protect against online threats. Over the years, the company expanded by acquiring other technology firms and developing a wider range of security products, including software and services. A key moment was their decision to create the "Security Fabric," a platform where all their different products could work together and share information to provide stronger, more coordinated protection.
What it actually does
Fortinet sells cybersecurity products and services to protect the computer networks of businesses, governments, and other organizations from online attacks. Think of it as a comprehensive security system for a company's entire digital world, from their physical offices to their data in the cloud. Their main products are called FortiGate, which are next-generation firewalls (advanced devices that inspect internet traffic for threats), but they also sell a wide range of related software and services. This includes protection for individual computers, web applications, and the specialized technology used in industrial settings.
Product Revenue
This part of the business involves selling physical hardware and software. The core product is the FortiGate next-generation firewall, a device that acts as a gatekeeper for a company's network to block malicious traffic. They also sell other hardware like secure switches (devices that connect computers within a network) and wireless access points. This segment provides the foundation for their other services and represents a little over a third of the company's total revenue.
Service Revenue: Security Subscriptions
This is the largest and fastest-growing part of Fortinet's business, making up nearly 40% of its income. When a customer buys a FortiGate firewall, they can also purchase subscriptions to a variety of security services called FortiGuard. These subscriptions provide continuous updates to protect against the latest viruses, malware, and other online threats, much like how an antivirus program on a personal computer gets regular updates. This creates a steady stream of recurring revenue (predictable income from ongoing payments) for the company.
Service Revenue: Technical Support
This segment, which accounts for just under a third of revenue, provides customers with technical assistance and support for their Fortinet products. This service, often called FortiCare, gives businesses access to experts who can help them install, configure, and troubleshoot their security systems. It's an important part of their business because it ensures customers can effectively use the products they've purchased and helps build long-term relationships. This also provides a reliable source of recurring income for the company.
What management is betting on now
Fortinet's leadership is focused on three key growth areas: Secure Networking, Unified SASE (Secure Access Service Edge), and Security Operations. They are investing heavily in expanding their SASE offerings, which provide cloud-based security for employees working from anywhere, a growing need in today's world of remote work. The company also aims to sell more of its different products to its existing large customer base, a strategy known as platform consolidation. By integrating more artificial intelligence into their products, they hope to automate threat detection and make their security platform easier for customers to manage.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$318.90M
FY2024 Q3
$571.80M
FY2024 Q4
$380.00M
FY2025 Q1
$796.80M
FY2025 Q2
$284.10M
FY2025 Q3
$567.50M
FY2025 Q4
$577.40M
FY2026 Q1
$1.01B
Revenue
$1.85B
Net income
$534.50M
Diluted EPS
0.72
Operating cash flow
$1.08B
Free cash flow
$1.01B
Fetching…
Sources
Revenue
$1.91B
Net income
$506.00M
Diluted EPS
0.67
Operating cash flow
$620.20M
Free cash flow
$577.40M
Fetching…
Sources
Revenue
$1.72B
Net income
$473.90M
Diluted EPS
0.62
Operating cash flow
$655.20M
Free cash flow
$567.50M
Fetching…
Sources
Revenue
$1.63B
Net income
$440.10M
Diluted EPS
0.57
Operating cash flow
$451.90M
Free cash flow
$284.10M
Fetching…
Sources
Revenue
$1.54B
Net income
$433.40M
Diluted EPS
0.56
Operating cash flow
$863.30M
Free cash flow
$796.80M
Fetching…
Sources
Revenue
$1.66B
Net income
$526.20M
Diluted EPS
0.68
Operating cash flow
$477.60M
Free cash flow
$380.00M
Fetching…
Sources
Revenue
$1.51B
Net income
$539.90M
Diluted EPS
0.70
Operating cash flow
$608.10M
Free cash flow
$571.80M
Fetching…
Sources
Revenue
$1.43B
Net income
$379.80M
Diluted EPS
0.49
Operating cash flow
$342.00M
Free cash flow
$318.90M
Fetching…
Sources
Is it cheap or expensive?
Fair value $104.07 vs current price $166.83
Wall Street consensus is the average analyst price target: $116.76 (12.2% higher than our fair-value estimate).
Our most-likely fair value is $104.07 a share — about 37.6% below today's price of $166.83, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $2.7B - more cash than debt. Interest coverage 103.7x.
Net debt
$-2.73B
Interest coverage
103.72x
Fortinet, Inc.'s profit covers its interest bill about 103.7 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
FTNT
BASELINE
Fortinet, Inc.
Total debt $567.20M Interest coverage 103.72x This is the baseline the peer rows are being compared against.
Total debt $2.13B Interest coverage 654.16x +531% vs FTNT Carries about 6.3x more debt cushion than FTNT.
Total debt $821.34M Interest coverage -10.47x -100% vs FTNT This peer has almost no interest-payment cushion compared with FTNT.
Total debt $1.87B Interest coverage -24.32x -100% vs FTNT This peer has almost no interest-payment cushion compared with FTNT.
Total debt $1.97B Interest coverage 415.55x +301% vs FTNT Carries about 4.0x more debt cushion than FTNT.
Total debt $411.00M Interest coverage 38.25x -63% vs FTNT Carries about 2.7x less debt cushion than FTNT.
What you should know
The case for and against FTNT
3 Rewards
1 Risk
Rewards
-
Revenue grew 4.6% last year.
-
Returns 132.4% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 54.2% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
62.02x
Forward P/E
48.70x
P/B
123.76x
P/S
17.19x
EV/EBITDA
50.61x
PEG ratio
3.55x
Profitability
How much profit each dollar creates
Gross margin
80.3%
Operating margin
31.3%
Net margin
27.5%
ROE
132.4%
ROA
13.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.57x
Current ratio
1.15x
Quick ratio
1.03x
Total debt
$567.20M
Total cash
$3.29B
Growth
How the business has been compounding
Revenue TTM
$7.11B
Revenue 5Y CAGR
19.4%
EPS TTM
2.69
EPS 5Y CAGR
31.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.80B
Free CF TTM
$2.23B
FCF margin
31.3%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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