At least a dozen Wall Street analysts hiked their price targets on Fortinet in the wake of the cybersecurity firm's investor day on Monday, where it provided three- to five-year financial targets. Fortinet stock dipped on Tuesday as the Nasdaq composite retreated.
Fortinet management declined to provide a preliminary 2025 outlook.
The company competes in the firewall network security market vs. Palo Alto Networks, Check Point Software Technologies and others. Firewalls block online intrusions and monitor Web-based apps.
Fortinet told analysts it expects firewall appliance sales to rebound as customers upgrade to new software in 2026.
"Fortinet provided investors with new medium-term targets," said TD Cowen analyst Shaul Eyal in a report. "These were slightly above the Street and imply that the No. 1 vendor in global firewall shipments will continue to take share from legacy firewall vendors."
UBS analyst Roger Boyd said in a report: "FTNT clarified that they see 25% of deployed Fortigate devices going EoS (software) in 2026, or about 650,000 units that they think could represent $400 million to $450 million in additional product revenue."
Fortinet Stock: Billings Growth
In addition, Fortinet and many other cybersecurity firms are focused on a new growth market: Secure Access Service Edge. SASE offers a fast and cost-effective way of securing an organization's branch offices and remote workers.
"Over (the next three to five years), the company expects billings and revenue to grow at a 12% CAGR, which it noted is faster than the overall market, relative to consensus expectations of 12% year-over-year growth for both billings and revenue in 2025 and 13% for both metrics in 2026," Susquehanna analyst Shyam Patil noted in a report.
He added: "Management expects gross margins to contract modestly moving forward due to increased product sales in the overall mix driven by firewall refreshes, and the company provided a modeling point of 79% to 80% gross margins adjusting for these factors, down modestly from 81% gross margins year-to-date."
On the stock market today, Fortinet stock dipped more than 1% to 90.59 in morning trading. Fortinet stock has climbed 54% in 2024. But FTNT stock has pulled back from an intraday high of 100.59 set on Nov. 13.
Bank of America analyst Tal Liani said in a report: "On the one hand, management did not provide guidance for 2025, driving some uncertainty about the magnitude of the upcoming firewall refresh cycle. On the other hand, the three- to five-year guidance targets are solid, and we see room for upside versus Street estimates."
Fortinet Stock: No 2025 Guidance
Jefferies analyst Joseph Gallo said in a report: "The shape of 2025 billings growth remains a mystery, with management not willing to talk about 2025 guide pre-Q4 results."
Fortinet stock holds a Relative Strength Rating of 93 out of a best-possible 99, according to IBD Stock Checkup.
The Computer Software-Security group ranks No. 104 out of 197 industry groups that IBD tracks.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
