The Point for North America

Research evidence excerpt

The Point for North America

what we think should be scale economies as PH ramps up commercial OE sales as

well as a still favorable pricing/stable supply chain environment, we see PH

Aerospace continuing to be one of the major drivers for PH to continue to record

double digit EPS growth moving forward.

Andrew Kaplowitz

Fortinet, Inc. (FTNT.O) - C2Q26 Preview: A lot at Stake Here; Decomposing

Detailed Bull/Bear Views

FTNT doubling YTD makes it the best-performing cyber (and top-decile-

performing software) stock, which against peak valuation for a perceived cyclical

hardware business at/near perceived peak trends, and low conviction on

accelerating software trajectory is galvanizing bears. Into results (7/29) and what

we believe is mixed investor sentiment/positioning, we decompose these 2 key

investor debate-points: 1) product growth complexion (durability/diversity), and 2)

services re-acceleration slope/scope (topline quality), where we largely shake-out

balanced in our views, with intra-Q field work that surprisingly, wasn’t

unequivocally negative. We concede FTNT’s next leg higher is almost-entirely

contingent on #2 where our confidence tilts muted, with likely-stubborn GM

pressures also top-of-mind. However, near-term growth revisions trending

directionally positive, combined with FTNT’s operational rigor/GAAP

support/buyback backstop should buoy shares, balancing risk/reward, in our

view. As a result, we’re staying Neutral but lifting PT to $165 on rebased higher

multiples (peak-ish but still discount to cyber majors).

Fatima Boolani

FTNT Historical NTM Multiples

FTNT Historical NTM Multiples*

90x Covid Era (Mar'20 - May'23)

80x

70x

60x

50x

40x 39x

30x

20x 23x

10x

7x

0x

Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jul-24 Jul-25 Jul-26

EV/S EV/FCF P/E