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what it is
Fortinet sells the digital locks, guards, and traffic cops that companies use to keep their networks and data safe.
how it gets paid
Last year Fortinet made $6.8B in revenue. firewall appliances was the main engine at $2.60B, or 38% of sales.
why it's growing
Revenue grew 14.2% last year. The 80.8% gross margin matters most because it shows Fortinet kept its economics intact even after the refresh-cycle mess.
what just happened
Fortinet just posted $0.81 EPS, beating the $0.74 estimate by 9.46%.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
95/100 earnings predictability — you can trust these numbers
29.9x trailing p/e — priced about right
92.5% return on capital — a money-printing machine
xvary composite: 78/100 — average
What they do
Fortinet sells the digital locks, guards, and traffic cops that companies use to keep their networks and data safe.
Fortinet wins because customers buy one platform that handles firewall, SD-WAN, WiFi, switching, and SASE instead of stitching together five vendors. Switching costs (changing vendors after your network is built) → expensive rewiring and retraining → your IT team avoids pain. That shows up in a 37.5% operating margin and 92.5% return on capital from.
How they make money
$6.8B
annual revenue · their business grew +14.2% last year
firewall appliances
$2.60B
+11.0%
sd-wan and secure networking
$1.10B
+12.5%
wifi and lan edge
$0.55B
+12.5%
sase and cloud security
$0.85B
+14.2%
support and security services
$1.70B
+15.7%
The products that matter
network security appliances
Firewalls and SD-WAN
supports the $6.8B business
this is the installed-base foundation. the snapshot does not split out segment revenue, but this core category underpins the company's $6.8B in total sales.
core
cloud and threat protection
Cloud Security and Threat Detection
part of 14.2% growth
these offerings are part of the reason revenue reached $6.8B and grew 14.2% from a year ago. the exact contribution is not disclosed in this snapshot.
growth
secure access platform
Universal SASE
margin-supporting platform mix
this is the strategic expansion bet: move from boxes to broader security delivery while protecting a 36.0% operating margin. the revenue split is thin here, so treat it as direction, not precision.
strategic
Key numbers
92.5%
return on capital
Return on capital → profit generated from invested money → so what: Fortinet squeezes unusual profit out of every dollar it uses.
37.5%
operating margin
Operating margin → profit after running the business → so what: this is a software-like margin in a business that still sells hardware.
$11B
FY2028 revenue
That is Value Line's revenue estimate for FY2028, up from $6.8B today, which frames the long-term growth case.
29.9x
trailing p/e
P/E → how many dollars investors pay for one dollar of profit → so what: the stock is not cheap enough to hide a bad quarter.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- long-term debt $496M (1% of capital)
- net profit margin 28.8% — keeps 29 cents of every dollar in revenue
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in FTNT 3 years ago → it's now worth $16,420.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Fortinet just posted $0.81 EPS, beating the $0.74 estimate by 9.46%.
Revenue reached $1.91B in the quarter, based on the company earnings release cited in the source set. Gross margin stayed at 80.8%, which is the real proof that this business still has pricing power.
$1.91B
revenue
$0.81
eps
80.8%
gross margin
the number that mattered
The 80.8% gross margin matters most because it shows Fortinet kept its economics intact even after the refresh-cycle mess.
-
fortinet’s most recent public quarterly results did not prompt a rebound in the share price.indeed, the stock is roughly unchanged since our october report, even though most third-quarter trends improved.
-
to recap, the stock suffered a large fall this summer after management misjudged a projected product upgrade cycle (see prior report).
-
september-period revenues rose 14% and surpassed our estimate, while gaap earnings were ahead of our call, though other items weighed on sentiment. (note: our presentation is now based on non-gaap.
-
only the 2025 quarterly results have been restated.) the business outlook is a little less clear.
-
even though the misjudged impact of the product upgrade seems to be in the past, there are some new modest concerns.
source: company earnings report, 2026
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What could go wrong
the #1 risk is another security-appliance demand reset after the product-cycle misread.
med
product-cycle forecasting risk
management already misjudged an upgrade cycle once. that matters because fortinet still sells a business anchored in security hardware and related platform demand.
If demand timing slips again, the market will care less about the 29.5% net margin and more about whether growth is dependable at all.
med
multiple compression
29.9x trailing earnings is a quality multiple. it works when revenue is growing 14.2% and margins stay at 36.0%. it works less well if either number drifts lower.
This is the classic good-company, full-price-stock problem. the business can stay good while the stock still disappoints.
med
institutional sponsorship cooling
last quarter showed 566 buyers versus 721 sellers. that does not decide the thesis, but it tells you big money has been more willing to trim than add.
When institutional flow leans negative, upside usually needs cleaner earnings proof. sentiment stops helping and starts demanding.
if growth slows materially from the current 14.2% while the stock still trades at 29.9x earnings, the margin for error gets thin fast.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
14.2% revenue growth
on a $6.8B base, double-digit growth is doing a lot of work in the valuation story. if that number fades, the stock probably notices.
risk
any repeat of the product-cycle miss
the market can forgive one forecasting error. a second one would make the earlier stumble look less accidental.
trend
margin durability
29.5% net margin and 36.0% operating margin are the cushion. you want those numbers holding while growth normalizes.
earnings
the next print needs to feel boring
after $0.62 Q4 EPS and $1.7B revenue, the next catalyst is simple: another clean quarter with less narrative drama around timing and guidance.
Analyst rankings
short-term outlook
top 5%
momentum score 1 is the highest rating. in human-speak, analysts think FTNT has better near-term performance odds than almost every stock.
risk profile
average
stability score 3 means typical stock risk. you are not buying a defensive utility, but you are not buying chaos either.
chart momentum
below average
technical score 4 says the chart still needs repair. fundamentals improved faster than sentiment did.
earnings predictability
95 / 100
predictability this high usually means management's model is understandable. the irony is that one product-cycle mistake still managed to shake confidence.
source: institutional data
Institutional activity
566 buyers vs. 721 sellers in 3q2025. total institutional holdings: 0.5B shares.
source: institutional data
Price targets
3-5 year target range
$65
$146
$81
current price
$106
target midpoint · +31% from current · 3-5yr high: $175 (+115% · 21% ann'l return)
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