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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on FTNT

Fortinet's recent performance has been impacted by concerns ahead of its upcoming earnings report, with expectations not aligned for a likely earnings beat. A class action lawsuit notice was issued to shareholders, and Accurate Wealth Management LLC decreased its stake in the company by 48%. Additionally, Fortinet's stock has been rated as "Hold" by thirty-four research firms, with three recommending a sell rating. The company benefits from a 2026 firewall refresh cycle and strategic partnerships, but faces a mandatory refresh cycle and legacy tech narrative.

1.c. Company Highlights

2. Fortinet's Q4 2025 Earnings: A Strong Performance

Fortinet's fourth quarter 2025 earnings conference call highlighted the company's strong financial performance, with total billings growing 18% to $2.37 billion and revenue growing 15% to $1.91 billion. The company's product revenue increased 20% to $691 million, driven by broad-based growth across the product portfolio. The provision margin was 37.3%, exceeding the high end of guidance. Earnings per share (EPS) came in at $0.81, beating estimates of $0.743. Free cash flow was $577 million, and adjusted free cash flow was $589 million, up $130 million.

Publication Date: Feb -06

📋 Highlights
  • Billings & Revenue Growth:: Q4 billings rose 18% to $2.37B; revenue grew 15% to $1.91B, with product revenue up 20% to $691M.
  • Unified SASE Expansion:: Unified SASE billings surged 40%, contributing 27% of total Q4 billings, driven by Sovereign SASE innovation and cost advantages.
  • Free Cash Flow & Share Repurchases:: Free cash flow reached $577M; $413M spent on shares repurchased (730K shares in Q4, 4.6M quarter-to-date).
  • 2025 Annual Performance:: Full-year billings grew 16% to $7.55B; revenue up 14% to $6.8B, with 2026 guidance projecting $8.4–8.6B billings and $7.5–7.7B revenue.
  • Services & Pricing Strategy:: Services revenue expected to rebound in 2026 via product growth and higher-margin offerings; 5–20% appliance price hikes planned for 2026.

Unified SASE and Product Refresh Driving Growth

Fortinet's Unified SASE billing grew 40%, representing 27% of total billing, driven by its unique advantages in Sovereign SASE, a single OS with three functions (network security, SD-WAN, and SASE), and a cost advantage. The company's strong growth in Unified SASE and product refresh does not affirm fears of cannibalization, with SASE seen as an additional business opportunity rather than a replacement. The 2020 and 2021 refresh cohorts are still engaging, driven by a need for additional security, and upgrading their underlying technology at the edge.

Guidance and Outlook

For the full year 2025, billings grew 16% to $7.55 billion, and revenue grew 14% to $6.8 billion. The company expects to achieve the Rule of 45 for the seventh consecutive year in 2026. Guidance for the first quarter and full year 2026 is as follows: billings in the range of $1.77 billion to $1.87 billion and $8.4 billion to $8.6 billion, respectively; revenue in the range of $1.7 billion to $1.76 billion and $7.5 billion to $7.7 billion, respectively. Analysts estimate next year's revenue growth at 10.6%.

Valuation and Metrics

Fortinet's current valuation metrics include a P/E Ratio of 32.15, P/S Ratio of 9.23, and EV/EBITDA of 25.0. The company's Return on Invested Capital (ROIC) is 33.25%, and Return on Equity (ROE) is 119.87%. The stock's Free Cash Flow Yield is 3.35%. These metrics indicate a high-growth company with strong profitability, but the valuation multiples suggest that the stock may be priced for high expectations.

Strategic Initiatives and Innovation

Fortinet is investing in innovation, including a new ASIC chip that will be announced this year, improving performance and adding functions. The company is also working closely with customers to develop technology for better protection, particularly in the area of AI compute demand. Fortinet's partnership with NVIDIA and BlueField DPU is a software approach that complements its secured ASIC, providing 10x better performance at lower cost.

3. NewsRoom

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Palo Alto Vs. Fortinet: Why Fortinet Comes Out On Top

Feb -08

Source: seekingalpha.com

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Fortinet, Inc. $FTNT Stake Decreased by BI Asset Management Fondsmaeglerselskab A S

Feb -07

Source: defenseworld.net

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Fortinet Q4 Earnings Call Highlights

Feb -07

Source: defenseworld.net

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Fortinet Q4 Earnings & Revenues Beat Estimates, Increase Y/Y

Feb -06

Source: zacks.com

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Fortinet Surges on Strong Q4 Results and Optimistic FY26 Outlook

Feb -06

Source: gurufocus.com

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Fortinet fourth quarter earnings beat driven by enterprise demand

Feb -06

Source: proactiveinvestors.com

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Breakfast News: Amazon's AWS Special Delivery

Feb -06

Source: fool.com

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Fortinet Stock Rises After Earnings Beat. Why It Can Dodge the Tech Selloff.

Feb -06

Source: barrons.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.00%)

6. Segments

Network Security Solutions

Expected Growth: 14.0%

Fortinet's network security solutions drive growth through increasing demand for cybersecurity, expanding customer base, and high renewal rates. The company's strong product portfolio, innovative technologies, and strategic acquisitions fuel its 14.0% growth, outpacing the industry average. FortiGate, FortiWeb, and FortiMail solutions lead the charge, addressing evolving threats and customer needs.

7. Detailed Products

FortiGate

A series of network security appliances that provide firewall, VPN, antivirus, and intrusion prevention capabilities.

FortiWeb

A web application firewall that protects web applications from attacks and data breaches.

FortiMail

An email security solution that protects against spam, phishing, and malware.

FortiClient

An endpoint security solution that provides antivirus, VPN, and vulnerability management capabilities.

FortiSandbox

An advanced threat protection solution that detects and prevents unknown threats.

FortiAnalyzer

A log analytics and reporting solution that provides visibility and insights into network security.

FortiManager

A network security management solution that provides centralized management and automation.

8. Fortinet, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Fortinet's products and services are highly specialized, making it difficult for substitutes to emerge. However, the increasing adoption of cloud-based security solutions poses a moderate threat.

Bargaining Power Of Customers

Fortinet's customers are largely enterprises and governments, which have limited bargaining power due to their dependence on Fortinet's security solutions.

Bargaining Power Of Suppliers

Fortinet has a diversified supply chain, and its suppliers have limited bargaining power due to the company's strong market position.

Threat Of New Entrants

The network security market has high barriers to entry, including significant R&D investments and regulatory hurdles, making it difficult for new entrants to compete with Fortinet.

Intensity Of Rivalry

The network security market is highly competitive, with established players like Cisco, Juniper, and Palo Alto competing fiercely with Fortinet for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 182.41%
Debt Cost 3.95%
Equity Weight -82.41%
Equity Cost 9.37%
WACC -0.53%
Leverage -221.34%

11. Quality Control: Fortinet, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CrowdStrike

A-Score: 5.1/10

Value: 4.0

Growth: 8.8

Quality: 3.7

Yield: 0.0

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Palantir

A-Score: 4.8/10

Value: 0.0

Growth: 7.6

Quality: 8.9

Yield: 0.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Oracle

A-Score: 4.8/10

Value: 2.7

Growth: 6.8

Quality: 6.0

Yield: 2.0

Momentum: 8.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Zscaler

A-Score: 4.7/10

Value: 2.3

Growth: 8.4

Quality: 3.5

Yield: 0.0

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Fortinet

A-Score: 4.5/10

Value: 1.0

Growth: 9.1

Quality: 7.9

Yield: 0.0

Momentum: 4.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Adobe

A-Score: 4.5/10

Value: 3.0

Growth: 5.4

Quality: 9.2

Yield: 0.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

85.93$

Current Price

85.93$

Potential

0.00%

Expected Cash-Flows