Fortinet (FTNT) Stock Forecast & Price Target

Fortinet demonstrated strong financial performance, with product revenue rising 18% year-over-year to $559 million, driven by increased demand in key segments such as SASE, SecOps, and the Secure AI Data Center. The operating margin reached a record 36.9%, reflecting the company's effective scaling and disciplined expense management practices. Additionally, total revenue and billings both grew 14% year-over-year, indicating solid momentum in its subscription and support-based business model, complemented by robust annual recurring revenue growth in critical areas like Unified SASE and Security Operations.

Fortinet's shares experienced a significant drop of approximately 17% in after-hours trading despite improved Q2 results and raised full-year guidance, indicating investor caution amid shifting market dynamics. The firm reported a year-over-year decline in operating margins by 200 basis points, driven by heightened investments in sales, challenges from recent acquisitions, and foreign exchange pressures, all of which signal increasing cost burdens. Moreover, the anticipated slowdown in services revenue growth to a 13.7% midpoint for the fiscal year, down from 20% in FY24, raises concerns regarding the sustainability of revenue expansion amid a competitive landscape.