Fortinet (FTNT) Valuation Check as New Climb Partnership Expands Enterprise Security Distribution and Growth Potential

Fortinet (FTNT) is back in the spotlight after Climb announced a new distribution partnership that plugs Fortinet’s enterprise security stack directly into Climb’s reseller network across industries.

See our latest analysis for Fortinet.

The timing of this Climb deal comes as Fortinet’s share price, now around $82.22, has struggled in the near term with a negative year to date share price return. Even though the three year total shareholder return above 60 percent still signals solid long run wealth creation, it also suggests this kind of channel expansion could help rebuild momentum.

If this partnership has you thinking about where else growth and security themes might collide, it is worth exploring high growth tech and AI stocks as potential next wave beneficiaries.

With shares still lagging over the past year despite double digit revenue growth and a small discount to analyst targets, investors now face a key question: is Fortinet a buy on underappreciated growth, or is the market already pricing in its next leg higher?

Most Popular Narrative: 17% Undervalued

Fortinet’s narrative fair value of $99.03 sits notably above the last close at $82.22, framing this new distribution deal against a still discounted stock.

Fortinet is a model of profitability and operational efficiency. For its full fiscal year 2024, the company achieved a GAAP operating margin of 30.3% and a net profit margin of 29.3%.

Read the complete narrative.

Want to see why this narrative believes that kind of profitability can last, with growth and future profit multiples usually reserved for elite software franchises? Dive in to unpack the surprisingly aggressive revenue, margin, and earnings assumptions that build up to that higher fair value.

Result: Fair Value of $99.03 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks around Fortinet’s hardware heavy mix and recurring security vulnerabilities could compress margins, slow growth, and quickly challenge this undervaluation thesis.

Find out about the key risks to this Fortinet narrative.

Build Your Own Fortinet Narrative

If you see Fortinet’s story differently or would rather rely on your own analysis, you can build a fresh narrative in just a few minutes, Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Fortinet.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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