# Fortinet (FTNT.US)

Canonical: https://gigainvestors.com/s/FTNT

Analysis as of: 2026-10-16T07:28:40.137Z. Financial observations: FY2006–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $181.91 per share; close as of 2026-10-15.

Estimated value: low $40.14 per share, central $55.05 per share, high $63.73 per share. Buy at or below the central value $55.05 per share. Valuation as of 2026-10-16T07:28:40.137Z; scenarios are not confidence intervals.

Expected annual return: 5.0% at the stated quote. About 5.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- Positive operating margins follow a sustained upward trend (at least 90% explained, low residual variation), with no net losses or latest decline; improvement passes the margin-variation check

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.36×

- Sustained margin improvement: Yes

- Variation explained by rising trend: 95.4%

- Variation around the rising trend: 0.08×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.07×

- FY2018: 0.13×

- FY2019: 0.16×

- FY2020: 0.20×

- FY2021: 0.19×

- FY2022: 0.22×

- FY2023: 0.23×

- FY2024: 0.30×

- FY2025: 0.31×

- LTM to Jun 2026: 0.32×

### moat: pass

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC, median of available years: 57.5%

- ROIC, second-lowest year: 21.7%

- Typical minus recent gross margin: -3.7 pp

- Typical gross margin (annual median): 76.6%

- Recent gross margin (lower of latest and 3-year median): 80.4%

- Years with nonpositive capital: 10

- Capital spending / revenue: 5.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 11.4%

- FY2018: 22.2%

- FY2019: 21.7%

- FY2020: 52.8%

- FY2021: 35.4%

- FY2022: >100%

- FY2023: >100%

- FY2024: 62.3%

- FY2025: 75.4%

- LTM to Jun 2026: 96.3%

### economics: pass

- Owner earnings / net income, 5-yr: 0.99×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $6.1B

- Net income, five-year total: $6.2B

- Return on incremental invested capital: 68.5%

- Working capital / revenue, annual change: 0.3 pp

- Working capital / revenue, change between three-year averages: 2.9 pp

- Working capital / revenue, final three-year average: 28.6%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.86×

- FY2022: 1.00×

- FY2023: 1.15×

- FY2024: 0.93×

- FY2025: 0.98×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 11.4% vs 75.4%

- Per-share earnings: 0.04 to 2.26 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.4%

- Ordinary dilution, 5-year annual growth: -1.8%

- Market cap gain: $54B

- Cumulative retained earnings: -$546M

- Diluted shares, 10-year annual growth: -1.4%

- Diluted shares, 5-year annual growth: -1.8%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 68.2%

- Per-share value change: $2.23

- Per-share value, starting three-year median: $0.04

- Per-share value, ending three-year median: $2.26

- Buybacks concentrated in cheaper years (correlation): -0.13

- Average buyback yield: 2.9%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $368M

- Cumulative net income, 10 years: $7.4B

- ROIC, first three-year median: 11.4%

- ROIC, last three-year median: 75.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.04

- FY2017: $0.04

- FY2018: $0.38

- FY2019: $0.38

- FY2020: $0.58

- FY2021: $0.73

- FY2022: $1.06

- FY2023: $1.46

- FY2024: $2.26

- FY2025: $2.42

### accounting: pass

- Sloan accruals: -7.1%

- Receivables to sales index (DSRI): 1.01×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 10.8%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.40×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.29×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -14.6%

- FY2017: -24.9%

- FY2018: -9.9%

- FY2019: -12.3%

- FY2020: -14.7%

- FY2021: -15.1%

- FY2022: -14.0%

- FY2023: -10.9%

- FY2024: -5.3%

- FY2025: -7.1%

## Holders

- [Terry Smith](https://gigainvestors.com/FS): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 22.9% a year for ten years · "AI Sales Push Fortinet Shares to New Heights" (finance.yahoo.com, Aug 2026) · sales +10.7%

Story as of 2026-10-16T09:58:47.626Z; price observation 2026-10-15.

Price needs cash profits to grow 22.9% a year for ten years

- 2025-08-06: Fortinet forecasts third-quarter sales below estimates as trade uncertainty weighs ([finance.yahoo.com](https://finance.yahoo.com/news/fortinet-forecasts-third-quarter-sales-212121078.html))

- 2025-09-02: Fortinet receives downgrade as firewall refresh disappoints: Morgan Stanley ([seekingalpha.com](https://seekingalpha.com/news/4491160-fortinet-receives-downgrade-as-firewall-refresh-disappoints-morgan-stanley?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-11-05: Fortinet Q3 Earnings Beat, Cybersecurity Stock Falls On Revenue Guidance ([finance.yahoo.com](https://finance.yahoo.com/m/283cc87f-a885-33b4-9a07-d2222794d9c1/fortinet-q3-earnings-beat%2C.html))

- 2026-05-07: Why Fortinet (FTNT) Is Up 6.7% After Q1 Beat And Raised AI Security Outlook ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/why-fortinet-ftnt-6-7-131919576.html))

- 2026-06-24: Fortinet, IBD Stock Of The Day, Gets Network Firewall Boost From AI Data Centers ([finance.yahoo.com](https://finance.yahoo.com/m/4db4a226-5ea5-3dfb-a4f5-ee96b28e11f1/fortinet%2C-ibd-stock-of-the.html))

- 2026-08-12: Fortinet Lifts 2026 Guidance on Firewall, SASE Demand: Buy the Stock? ([finance.yahoo.com](https://finance.yahoo.com/technology/articles/fortinet-lifts-2026-guidance-firewall-145800016.html))

### Sales · FY2025–2026

sales +10.7%; source https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm; observed 2026-02-25.

- FY2017: $1.5B 

- FY2018: $1.8B 

- FY2019: $2.2B 

- FY2020: $2.6B 

- FY2021: $3.3B 

- FY2022: $4.4B 

- FY2023: $5.3B 

- FY2024: $6.0B 

- FY2025: $6.8B 

- FY2026: $7.5B 

### Gross margin · FY2026

gross margin 80.4%; source https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm; observed 2026-02-25.

- FY2017: 74.2% 

- FY2018: 75.0% 

- FY2019: 76.6% 

- FY2020: 78.0% 

- FY2021: 76.6% 

- FY2022: 75.4% 

- FY2023: 76.7% 

- FY2024: 80.6% 

- FY2025: 80.8% 

- FY2026: 80.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software infrastructure; annual sales are USD 6.8 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm (filed 2026-02-25); FY2025: revenue 6799600000; grossProfit 5497000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); FTNT.US: Fortinet, Inc. provides cybersecurity and convergence of networking and security solutions worldwide. The company offers FortiOS, a unified operating system designed to address cybersecurity threats; FortiASIC application-specific integrated circuit (ASIC)-based security processing units; FortiCloud, a private cloud software as a service platform; FortiAI, which provides a dual-layered defense across the Fortinet Security Fabric; FortiEndpoint, which converges secure connectivity, endpoint protection, and capabilities into a single agent; and OT Security, which protect the engineered systems that underpin infrastructure and supply chains. It also provides secure networking solutions that focus on the convergence of networking and security; network firewall solutions comprising FortiGate data centers, hyperscale, and distributed firewalls; wireless local area network solutions; and secure connectivity solutions. In addition, the company offers the Fortinet Unified Secure Access Service Edge solutions that include firewall, software-defined wide-area network, secure web gateway, cloud access services broker, data loss prevention, and zero trust network access; and web application firewalls, cloud network security with virtualized firewalls, cloud-native firewalls, cloud-native application protection, and code security. Further, it provides AI-driven security operation solutions, which include a suite of cybersecurity solutions, as well as FortiEDR, FortiXDR, FortiNDR, FortiSandbox, FortiDeceptor, FortiDLP, and FortiRecon. Additionally, the company offers FortiGuard Labs, a cybersecurity threat intelligence and research organization; FortiGuard and Other Security Services, a suite of AI-powered security capabilities that consists of FortiGuard application, content, device, NOC/SOC, and web security services; and FortiCare technical support services. Fortinet, Inc. was incorporated in 2000 and is headquartered in Sunnyvale, California.

### Why customers stay

Margins ranged from 76.7% to 80.8% during 2023–25; it earns 57.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: grossProfit / revenue = 76.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: grossProfit / revenue = 80.6%.

- Source: https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm (filed 2026-02-25); FY2025: grossProfit / revenue = 80.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); 10-year return on capital observations [[2017,0.11447865455099569],[2018,0.22245420897788745],[2019,0.21722979843682655],[2020,0.5275242244808491],[2021,0.3538341717799861],[2022,1.261384085189053],[2023,2.0935605300714735],[2024,0.6233988367449027],[2025,0.7535225487513428],[2026,0.9634092883599649]]; median 0.5754615306128759. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 75% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm (filed 2026-02-25); Gross margin observations: [[2021,0.7657231763509066],[2022,0.7544030425136958],[2023,0.7667772583320767]]; range within 2 percentage points.

### Where the cash goes

Spends 9.9% of cash earnings on expansion; earns 68.5% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2016: growth capex 18700000; upkeep 48500000; owner earnings 32200000. Growth capex / owner earnings = 0.5807453416149069.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2018: growth capex 0; upkeep 53000000; owner earnings 337600000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2019: growth capex 30600000; upkeep 61600000; owner earnings 331700000. Growth capex / owner earnings = 0.09225203497135966.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2020: growth capex 57100000; upkeep 68800000; owner earnings 488500000. Growth capex / owner earnings = 0.11688843398157625.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2021: growth capex 127446210.06337738; upkeep 168453789.93662262; owner earnings 522746210.0633774. Growth capex / owner earnings = 0.2438013085698429.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2022: growth capex 176900000; upkeep 104300000; owner earnings 857300000. Growth capex / owner earnings = 0.20634550332439053.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: growth capex 0; upkeep 204100000; owner earnings 1323400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: growth capex 130887027.20780146; upkeep 248012972.79219854; owner earnings 1619987027.2078013. Growth capex / owner earnings = 0.08079510823824154.

- Source: https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm (filed 2026-02-25); FY2025: growth capex 180691218.98741296; upkeep 184108781.01258704; owner earnings 1821291218.987413. Growth capex / owner earnings = 0.0992105035722251.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Incremental return on capital 0.6849909357071695, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,989400000],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm (filed 2026-02-25); FY2025: cash repurchases 2289800000 USD.

### Are managers owners

Insiders own 17.4% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); FTNT.US SharesStats.PercentInsiders = 17.362 percentage points; cache date 2026-10-16.

### What could break it

"We rely on third-party channel partners for substantially all of our revenue." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm (filed 2026-02-25); We rely on third-party channel partners for substantially all of our revenue.

### What the price says

The price assumes cash profits grow 22.9% yearly over ten years; actual growth was 74.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Ten-year compound average after fade. Initial solved rate 0.32065528404336396. Price 181.91; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.009068870961332114 → FY2025 2.3820183350607023. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $6.41 per share

- 2016-11: $6.02 per share

- 2016-12: $6.02 per share

- 2017-01: $6.65 per share

- 2017-02: $7.47 per share

- 2017-03: $7.67 per share

- 2017-04: $7.80 per share

- 2017-05: $7.87 per share

- 2017-06: $7.49 per share

- 2017-07: $7.38 per share

- 2017-08: $7.64 per share

- 2017-09: $7.17 per share

- 2017-10: $7.88 per share

- 2017-11: $8.41 per share

- 2017-12: $8.74 per share

- 2018-01: $9.21 per share

- 2018-02: $10.09 per share

- 2018-03: $10.72 per share

- 2018-04: $11.07 per share

- 2018-05: $12.24 per share

- 2018-06: $12.49 per share

- 2018-07: $12.58 per share

- 2018-08: $16.75 per share

- 2018-09: $18.45 per share

- 2018-10: $16.44 per share

- 2018-11: $14.77 per share

- 2018-12: $14.09 per share

- 2019-01: $15.31 per share

- 2019-02: $17.36 per share

- 2019-03: $16.79 per share

- 2019-04: $18.68 per share

- 2019-05: $14.50 per share

- 2019-06: $15.37 per share

- 2019-07: $16.06 per share

- 2019-08: $15.84 per share

- 2019-09: $15.35 per share

- 2019-10: $16.31 per share

- 2019-11: $21.02 per share

- 2019-12: $21.35 per share

- 2020-01: $23.07 per share

- 2020-02: $20.41 per share

- 2020-03: $20.23 per share

- 2020-04: $21.55 per share

- 2020-05: $27.84 per share

- 2020-06: $27.45 per share

- 2020-07: $27.66 per share

- 2020-08: $26.40 per share

- 2020-09: $23.56 per share

- 2020-10: $22.07 per share

- 2020-11: $24.65 per share

- 2020-12: $29.71 per share

- 2021-01: $28.95 per share

- 2021-02: $33.77 per share

- 2021-03: $36.88 per share

- 2021-04: $40.85 per share

- 2021-05: $43.71 per share

- 2021-06: $47.64 per share

- 2021-07: $54.45 per share

- 2021-08: $63.03 per share

- 2021-09: $58.41 per share

- 2021-10: $67.27 per share

- 2021-11: $66.42 per share

- 2021-12: $71.88 per share

- 2022-01: $59.45 per share

- 2022-02: $68.90 per share

- 2022-03: $68.35 per share

- 2022-04: $57.80 per share

- 2022-05: $58.83 per share

- 2022-06: $56.58 per share

- 2022-07: $59.65 per share

- 2022-08: $48.69 per share

- 2022-09: $49.13 per share

- 2022-10: $57.16 per share

- 2022-11: $53.16 per share

- 2022-12: $48.89 per share

- 2023-01: $52.34 per share

- 2023-02: $59.44 per share

- 2023-03: $66.46 per share

- 2023-04: $63.05 per share

- 2023-05: $68.33 per share

- 2023-06: $75.59 per share

- 2023-07: $77.72 per share

- 2023-08: $60.21 per share

- 2023-09: $58.68 per share

- 2023-10: $57.17 per share

- 2023-11: $52.56 per share

- 2023-12: $58.53 per share

- 2024-01: $64.49 per share

- 2024-02: $69.11 per share

- 2024-03: $68.31 per share

- 2024-04: $63.18 per share

- 2024-05: $59.32 per share

- 2024-06: $60.27 per share

- 2024-07: $58.04 per share

- 2024-08: $76.71 per share

- 2024-09: $77.55 per share

- 2024-10: $78.66 per share

- 2024-11: $95.05 per share

- 2024-12: $94.48 per share

- 2025-01: $100.88 per share

- 2025-02: $108.01 per share

- 2025-03: $96.26 per share

- 2025-04: $103.76 per share

- 2025-05: $101.78 per share

- 2025-06: $105.72 per share

- 2025-07: $99.90 per share

- 2025-08: $78.77 per share

- 2025-09: $84.08 per share

- 2025-10: $86.43 per share

- 2025-11: $81.13 per share

- 2025-12: $79.41 per share

- 2026-01: $81.26 per share

- 2026-02: $79.03 per share

- 2026-03: $81.72 per share

- 2026-04: $84.31 per share

- 2026-05: $137.97 per share

- 2026-06: $153.62 per share

- 2026-07: $161.95 per share

- 2026-08: $170.93 per share

- 2026-09: $178.76 per share

- 2026-10: $190.76 per share

## Annual estimated value (USD per share)

- FY2016: low $1.77 per share, central $2.01 per share, high $2.15 per share

- FY2017: low $1.95 per share, central $2.19 per share, high $2.34 per share

- FY2018: low $2.56 per share, central $2.87 per share, high $3.05 per share

- FY2019: low $3.16 per share, central $3.52 per share, high $3.74 per share

- FY2020: low $8.58 per share, central $11.35 per share, high $12.96 per share

- FY2021: low $11.48 per share, central $15.13 per share, high $17.25 per share

- FY2022: low $16.59 per share, central $22.57 per share, high $26.05 per share

- FY2023: low $20.19 per share, central $27.57 per share, high $31.87 per share

- FY2024: low $25.47 per share, central $34.20 per share, high $39.27 per share

- FY2025: low $34.67 per share, central $47.59 per share, high $55.12 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:34:22.153Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1262039/000126203926000007/ftnt-20251231.htm); period 2025-12-31, filed 2026-02-25.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.