📊 FTNT Key Takeaways
Is Fortinet, Inc. (FTNT) a Good Investment?
Fortinet demonstrates exceptional financial health with industry-leading profitability margins (80.3% gross, 31.4% operating), generating exceptional free cash flow of $1.0B (54.4% FCF margin) on $1.8B revenue. The company maintains a conservative leverage profile (0.50x debt/equity) with outstanding interest coverage (28.9x), indicating strong financial stability and capital efficiency.
Fortinet shows high-quality fundamentals with exceptional gross, operating, and free cash flow margins, indicating strong pricing power and disciplined cost control. Revenue growth remains solid at 14.2%, but earnings are growing more slowly than sales, suggesting some margin normalization or higher expense intensity. Overall, the business appears financially strong, cash-generative, and operationally resilient, though the liability-heavy balance sheet warrants monitoring.
Why Buy Fortinet, Inc. Stock? FTNT Key Strengths
- Exceptional profitability margins (80.3% gross, 31.4% operating, 28.9% net) typical of high-quality software/cybersecurity businesses
- Outstanding free cash flow generation ($1.0B annually, 54.4% FCF margin) demonstrating capital-efficient operations and low capex requirements
- Exceptional return on equity (54%) indicating highly efficient use of shareholder capital
- Solid revenue growth (14.2% YoY) with $1.8B scale demonstrating market demand and competitive positioning
- Conservative leverage (0.50x debt/equity) with exceptional interest coverage (28.9x) providing financial flexibility
- Strong cash position ($2.2B) supporting strategic investments and shareholder returns
- Asset-light business model with minimal capital expenditure ($70.6M) relative to revenue
- Excellent profitability with 80.5% gross margin, 30.7% operating margin, and 27.3% net margin
- Very strong cash generation with $2.23B in free cash flow and a 32.7% FCF margin
- Healthy financial flexibility supported by $2.50B in cash, low long-term debt, and very high interest coverage
FTNT Stock Risks: Fortinet, Inc. Investment Risks
- Tight liquidity metrics (Current Ratio 1.15x, Quick Ratio 1.07x) indicate potential working capital constraints
- EPS growth (7.1% YoY) lagging revenue growth (14.2% YoY) suggests share dilution or margin pressure
- Relatively modest ROA (5.4%) despite exceptional margins indicates underutilization of large asset base ($9.9B)
- High liabilities-to-equity ratio ($8.9B liabilities vs $989.7M equity) despite low debt/equity ratio suggests operational leverage
- Revenue growth rate (14.2%) moderating compared to high-margin SaaS/security software peers may indicate market maturation
- Net income growth of 6.2% is trailing revenue growth of 14.2%, which may indicate rising costs or margin pressure
- Very low equity base makes ROE unusually high and reflects a balance sheet with limited equity cushion
- Liquidity is adequate but not especially conservative, with a 1.17x current ratio and 1.09x quick ratio
Key Metrics to Watch
- Operating margin sustainability and trend - critical for validating business model quality
- Free cash flow conversion ratio - ensure cash generation remains above 50% of revenue
- Current ratio trajectory - monitor if liquidity tightens further or improves
- Revenue growth acceleration/deceleration - assess competitive positioning and TAM capture
- EPS growth vs. revenue growth spread - confirm no structural share dilution or margin erosion occurring
- Operating margin and net income growth relative to revenue growth
- Free cash flow margin and changes in stockholders' equity
Fortinet, Inc. (FTNT) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 54.4% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
FTNT Profit Margin, ROE & Profitability Analysis
FTNT vs Technology Sector: How Fortinet, Inc. Compares
How Fortinet, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Fortinet, Inc. Stock Overvalued? FTNT Valuation Analysis 2026
Based on fundamental analysis, Fortinet, Inc. appears fundamentally strong relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Fortinet, Inc. Balance Sheet: FTNT Debt, Cash & Liquidity
FTNT Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Fortinet, Inc.'s revenue has grown significantly by 103% over the 5-year period, indicating strong business expansion. The most recent EPS of $1.46 reflects profitable operations.
FTNT Revenue Growth, EPS Growth & YoY Performance
FTNT Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $1.5B | $433.4M | $0.56 |
| Q3 2025 | $1.5B | $473.9M | $0.62 |
| Q2 2025 | $1.4B | $379.8M | $0.49 |
| Q1 2025 | $1.4B | $299.3M | $0.39 |
| Q3 2024 | $1.3B | $322.9M | $0.41 |
| Q2 2024 | $1.3B | $266.3M | $0.33 |
| Q1 2024 | $1.3B | $247.7M | $0.31 |
| Q3 2023 | $1.1B | $231.6M | $0.29 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Fortinet, Inc. Dividends, Buybacks & Capital Allocation
FTNT SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Fortinet, Inc. (CIK: 0001262039)
📋 Recent SEC Filings
❓ Frequently Asked Questions about FTNT
What is the AI rating for FTNT?
Fortinet, Inc. (FTNT) has a Combined AI Rating of BUY from Claude (STRONG BUY) and ChatGPT (BUY) with 84% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are FTNT's key strengths?
Claude: Exceptional profitability margins (80.3% gross, 31.4% operating, 28.9% net) typical of high-quality software/cybersecurity businesses. Outstanding free cash flow generation ($1.0B annually, 54.4% FCF margin) demonstrating capital-efficient operations and low capex requirements. ChatGPT: Excellent profitability with 80.5% gross margin, 30.7% operating margin, and 27.3% net margin. Very strong cash generation with $2.23B in free cash flow and a 32.7% FCF margin.
What are the risks of investing in FTNT?
Claude: Tight liquidity metrics (Current Ratio 1.15x, Quick Ratio 1.07x) indicate potential working capital constraints. EPS growth (7.1% YoY) lagging revenue growth (14.2% YoY) suggests share dilution or margin pressure. ChatGPT: Net income growth of 6.2% is trailing revenue growth of 14.2%, which may indicate rising costs or margin pressure. Very low equity base makes ROE unusually high and reflects a balance sheet with limited equity cushion.
What is FTNT's revenue and growth?
Fortinet, Inc. reported revenue of $1.8B.
Does FTNT pay dividends?
Fortinet, Inc. does not currently pay dividends.
Where can I find FTNT SEC filings?
Official SEC filings for Fortinet, Inc. (CIK: 0001262039) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is FTNT's EPS?
Fortinet, Inc. has a diluted EPS of $0.72.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is FTNT a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Fortinet, Inc. has a BUY rating with 84% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is FTNT stock overvalued or undervalued?
Valuation metrics for FTNT: ROE of 54.0% (sector avg: 22%), net margin of 28.9% (sector avg: 18%). Higher ROE suggests strong returns relative to peers.
Should I buy FTNT stock in 2026?
Our dual AI analysis gives Fortinet, Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is FTNT's free cash flow?
Fortinet, Inc.'s operating cash flow is $1.1B, with capital expenditures of $70.6M. FCF margin is 54.4%.
How does FTNT compare to other Technology stocks?
Vs Technology sector averages: Net margin 28.9% (avg: 18%), ROE 54.0% (avg: 22%), current ratio 1.15 (avg: 2.5).
Why is FTNT's return on equity (ROE) so high?
Fortinet, Inc. has a return on equity of 54.0%, significantly above the Technology sector average of 22%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 28.9% net margin.