Fortinet (FTNT) Stock Slides as Analyst Downgrades on Valuation Concerns

TLDR

• Freedom Capital Markets downgraded Fortinet (FTNT) from Buy to Hold on Monday, citing valuation concerns
• Price target held at $90 despite the rating cut
• Fortinet posted a strong Q4 with 20% product revenue growth and 18% billings growth
• 30 analysts have revised earnings estimates downward for the upcoming period
• Risks include rising memory prices, currency volatility, and growing competition

Fortinet (FTNT) was downgraded to Hold from Buy by Freedom Capital Markets on Monday. Analyst Almas Almaganbetov kept the price target at $90 but flagged valuation as the key concern. The stock currently trades at a P/E ratio of 33.65.

Fortinet, Inc., FTNT

The move came just after Fortinet posted a strong Q4 2025. Product revenue grew 20% and billings rose 18% year-over-year, well ahead of the 12% consensus estimate. A large-scale network equipment refresh cycle helped drive those numbers.

The service segment held steady too, with Unified SASE cloud solutions expanding and recent acquisitions integrating well. Gross profit margins came in at 80.46%. Some customer caution around contract durations was flagged, but it didn’t overshadow the overall result.

Other Analysts Still Bullish

Not everyone is pulling back. Several firms raised their price targets after Q4 results.

TD Cowen kept its Buy rating with a $100 target. BMO Capital raised its target to $95, though it noted service revenue growth missed projections. RBC Capital lifted its target to $90, calling the quarter a solid base for 2026.

UBS also moved to $90, pointing to strong product growth and improved Enterprise License Agreement renewals. Jefferies matched that $90 target, citing the 18% billings growth that came in well above expectations.

Risks Ahead

Despite the strong quarter, headwinds are building. Rising memory prices and currency swings could pressure margins going forward. Competitive pressure in the cybersecurity space is also increasing.

InvestingPro data shows 30 analysts have revised earnings estimates downward for the upcoming period — a trend worth watching.

Freedom Capital’s downgrade is a straight valuation call. The business is performing well. The stock price may have simply run ahead of where the fundamentals can justify it right now.

Fortinet shares were down 4.52% at the time of the downgrade.

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