Fortinet (FTNT) Stock Forecast & Price Target

Fortinet's total revenue demonstrated robust growth of 14%, totaling $1.63 billion, which exceeded both the Street's expectations and the midpoint of the company's guidance. The company's Annual Recurring Revenue (ARR) also showed strong performance, with Unified SASE ARR reaching $1.15 billion—up 22% year-over-year—and Security Operations ARR increasing by 35%, indicating a significant shift towards recurring services. Additionally, both services revenue and product revenue recorded a 14% and 13% increase year-over-year, respectively, supporting expectations for continued revenue growth, margin improvement, and enhanced cash flow in the future.

Fortinet's stock experienced a substantial decline of approximately 17% in after-hours trading, despite raising full-year 2025 guidance for revenue, billings, and pro forma earnings per share, indicating deep investor skepticism regarding its financial outlook. The company's operating margins have decreased by 200 basis points year-over-year, attributed to heightened sales investments, the impact of recent acquisitions, and foreign exchange pressures, which raises concerns about profitability sustainability. Furthermore, the anticipated slowdown in services revenue growth, dropping from 20% in FY24 to a 13.7% midpoint for the current fiscal year, further contributes to the negative sentiment surrounding the firm’s future financial performance.