Fortinet on the rise
Over the past ten years, sales have increased from USD 1.01 billion to USD 5.96 billion.
In the same period, free cash flow increased from USD 0.28 to USD 2.43 per share.
The business is highly scalable and highly profitable, with an FCF margin of over 30%. As a result, growth was financed entirely from current cash flow. The company has no significant debt.
Since 2017, the company has even been successively buying back its own Aktien and has reduced the number of outstanding shares from 872 to 764 million.
Another share price slump
However, all this has not prevented Fortinet from undergoing a major correction or crashing from time to time.
At this point, I could once again sing the song of the market's irrational short-sightedness, but I'll leave it at that.
Instead, let's take a look at what caused the share price to plummet.
At USD 0.64 per share, Q2 earnings were well above expectations of USD 0.59. With sales of USD 1.63 billion, analysts' estimates of USD 1.62 billion were also exceeded.
For the year as a whole, this corresponds to a 14% increase in sales and a 12% jump in profits.
Operating cash flow improved by 32% to USD 451.9 million. Due to major acquisitions, however, FCF fell from USD 318.9 million to USD 284.1 million.
Whether all this justifies a share price fall of almost 30 % is questionable. At UBS, however, a reason was immediately found. The bank warns of "low double-digit" growth rates, as Fortinet is only forecasting a sales increase of 11% for the fourth quarter, which is below the long-term target of 12%.
I had to laugh heartily.
Forecasts, panic and potential
The forecast for the current financial year was adjusted to an insignificant extent and largely confirmed.
For example, the sales forecast was raised from an average of USD 6.75 billion to USD 6.80 billion, but the service business forecast was lowered from USD 4.65 billion to USD 4.60 billion. The operating margin was increased from an average of 32.5 % to 32.75 % and earnings expectations were raised slightly from USD 2.46 to USD 2.50 per share.
Neither the quarterly figures nor the outlook have provided any profound new information that has or would fundamentally change the situation.
According to consensus estimates, free cash flow is expected to increase by 14% to USD 2.77 per share this year.
Fortinet thus has a forward P/FCF of 28.3, making the stock fairly valued for the first time since August last year. Over the last five years, the P/FCF has averaged 29.7
Fortinet share: Chart from 13.08.2025, price: USD 78.47 - symbol: FTNT | Source: TWS
The initial panic quickly dissipated. The return above USD 78 even triggered a Kaufsignal was even triggered. A first possible Kursziel lies at USD 82.00 - 83.50. Above this level, even a quick Gap-Closeconceivable.
If, on the other hand, the share falls below USD 78, further price losses towards USD 73 or USD 70 must be expected.
