Fortinet (FTNT) Valuation in Focus Following Class Action Lawsuits Over FortiGate Refresh Disclosures

Fortinet (FTNT) is at the center of shareholder attention as several law firms have launched class action lawsuits alleging the company made misleading statements about its FortiGate firewall refresh. Questions around transparency are now swirling.

See our latest analysis for Fortinet.

Even before these legal developments, Fortinet’s share price had struggled for momentum this year, currently sitting at $78.86. The stock has posted a year-to-date share price return of -16.8%, reflecting fading enthusiasm despite ongoing initiatives like its new cybercrime partnership. Still, Fortinet’s longer-term trajectory remains impressive. A five-year total shareholder return of 218.5% highlights the underlying strength of its broader business.

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With heightened scrutiny and the stock still trading below analyst price targets, the question for investors is clear: does Fortinet offer a compelling value at current levels, or is the market already accounting for all future growth?

Most Popular Narrative: 20.4% Undervalued

With Fortinet trading at $78.86 and the most widely followed narrative setting fair value at $99.03, there is a clear gap suggesting further upside. This context raises important questions about what is driving such optimism despite recent share price headwinds.

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%. Its trailing-twelve-month profit margin stands at an impressive 30.6%. This level of profitability is a direct result of its organic growth model, which avoids the heavy non-cash charges associated with large acquisitions.

Read the complete narrative.

Want to see what assumptions power this number? The blueprint hinges on standout margins, consistent profits and operational discipline you don’t see every day. Curious which future projections and growth levers set this valuation apart? Dive in now for more details beneath the surface.

Result: Fair Value of $99.03 (UNDERVALUED)

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

However, potential product security vulnerabilities and reliance on hardware could quickly shift sentiment if these issues are not addressed by Fortinet’s management and engineering teams.

Find out about the key risks to this Fortinet narrative.

Build Your Own Fortinet Narrative

If seeing these numbers sparks your own ideas or inspires independent research, you can craft a Fortinet story that’s uniquely yours in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 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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