Fortinet Inc: Strong Product Growth and Accelerating Services

Research evidence excerpt

Fortinet Inc: Strong Product Growth and Accelerating Services

Global Research

30 July 2026ab

Fortinet Inc Equities

United StatesStrong Product Growth and Accelerating

Services Software

12-month rating Neutral

12m price target US$180.00Summary

Prior : US$115.00

2Q results again came in well ahead of expectations, led by 52% product revenue

growth and 14% services revenue growth, which accelerated from 12% in 1Q. In Price (29 Jul 2026) US$170.71

addition, FTNT raised FY26 guidance across billings, revenue, services revenue, margin, RIC: FTNT.O BBG: FTNT US

and EPS, with the updated services outlook implying continued acceleration through the

back half of the year. Mgmt cited demand tailwinds including AI infra buildouts, AI Trading data and key metrics

security concerns, SASE adoption, and continued strength in OT security. While investors 52-wk range US$170.71-74.39

may debate the durability of the recent product strength (pricing commentary suggests Market cap. US$126b

negative 4Q price-adj product growth), the 2Q results should increase confidence in the Shares o/s 740m (COM)

recurring parts of the business, headlined by the inflection in SASE ARR growth to 18%. Free float 74%

While our CY27E move higher following the print, we think shares are embedding a lot Avg. daily volume ('000) 6,287

of optimism at 39x EV/FCF on CY27E, and remain Neutral rated. Avg. daily value (m) US$874.5

Common s/h equity (12/26E) US$2.72b

Breaking down the 2Q beat P/BV (12/26E) 46.3x

We estimate that the 52% y/y product revenue benefited from 15pts+ of price Net debt to EBITDA (12/26E) NM

(HSD contribution to total billings growth in 2Q), implying that 1Q was the peak for

normalized product growth. That said, mgmt spoke to channel discipline, including EPS (UBS, diluted) (USD)

12/26E