Fortinet: Preview: Refresh Pull Forward at the Expense of Growth Next Year

Research evidence excerpt

Fortinet: Preview: Refresh Pull Forward at the Expense of Growth Next Year

J P M O R G A N North America Equity Research

27 July 2026

Fortinet Underweight

FTNT, FTNT US

Preview: Refresh Pull Forward at the Expense of Price (24 Jul 26):$152.37

Growth Next Year ▲Price Target (Dec-27):$100.00 Prior (Dec-26):$75.00

Fortinet is scheduled to report earnings on Wednesday, July 29th after market close.

Software - Large Cap / Mid & Small

Threat-driven refresh pull-forward is driving strong product growth this Q, Cap

but Street seems to be mis-modeling FY27. As one GSI commented this quarter, Brian Essex, CFA AC

CIOs are ‘freaking out’ with a greater level of urgency about an elevated threat (1-212) 622-5990

environment following the release of Mythos, GPT 5.5, and (recently) Chinese brian.essex@jpmchase.com

foundation models that are catching up to their U.S. peers. CIOs are focused on John Lee

getting the most current versions of software and hardware into their networks, and (1-212) 622-6064

john.h.lee@jpmorgan.com

FortiGate is benefiting from this trend this year. Remember those retiring J.P. Morgan Securities LLC

FortiGate units? (Figure 1RetiringFortiGateUnitsPeakin2026beforeTaperingofMeaningfulystarting2027) Our conversations with channel partners indicate that

most of the strength this quarter is the result of FortiGate refresh pull forward rather

than new customer, SASE or SecOps traction, as CIOs rush to refresh their installed Quarterly Forecasts (FYE Dec)

FortiGate estates. As this tends to be a very cyclical business, we are taking our Adj. EPS ($)

Product revenue estimates up for 2Q and cutting our FY27 Product estimates to 2025A 2026E 2027E

Q1 0.58 0.82A 0.69

reflect the pull forward, a dynamic of the business that we think the Street is Q2 0.64 0.76 0.80