TD Cowen has maintained a Buy rating and a $100.00 price target on Fortinet (NASDAQ:FTNT) in response to the cybersecurity company's strong 2025 year-end performance. The price objective mirrors an InvestingPro analysis cited by the company that indicates the shares are undervalued with meaningful upside from the current trading level of $78.93.
Fortinet reported robust operational metrics for the period, with product revenue rising 20% and billings advancing 18%. TD Cowen highlighted that the firm has delivered what it calls "Rule-of-45 performance" for a sixth straight year, a benchmark the analyst group uses to measure sustained growth and profitability.
Financial margins and revenue trends underpin the positive view: Fortinet posted an 80.46% gross profit margin and achieved 14.17% total revenue growth over the last twelve months. Management reconfirmed its long-term performance objectives and issued guidance for 2026 that implies revenue growth of 13% at the midpoint of the forecast range.
The company’s multi-year growth track record remains notable, with a five-year compound annual growth rate for revenue of 22%. That growth, however, is being priced into the shares, as reflected by a current price-to-earnings ratio of 32.56.
Product mix dynamics also featured in analysts’ assessments. Fortinet’s SASE (Secure Access Service Edge) and SecOps (Security Operations) offerings together accounted for 38% of fourth-quarter 2025 billings and continue to show strong momentum. TD Cowen observed that demand for Fortinet’s product suite is outpacing headwinds from higher memory average selling prices, which supports the firm's sustained positive stance on the stock.
On the earnings front, Fortinet exceeded consensus expectations in the company’s fourth-quarter 2025 results. Earnings per share came in at $0.81, above the forecasted $0.74, while revenue reached $1.91 billion versus the $1.86 billion analysts had anticipated. Despite beating estimates on both EPS and revenue, the stock declined in aftermarket trading following the reports.
Other broker reactions were mixed in tone though tilted toward acknowledging improving fundamentals. UBS raised its price target on Fortinet to $90 from $80 while retaining a Neutral rating, citing strong product growth and improved Enterprise License Agreement renewal activity. Jefferies likewise increased its price target to $90 from $80 but maintained a Hold rating, noting the company's 18% year-over-year billings growth which outpaced the consensus expectation of 12%.
Key takeaways
- TD Cowen reaffirmed a Buy rating and $100.00 price target after Fortinet's 2025 year-end results.
- Fortinet posted 20% product revenue growth, 18% billings growth, 80.46% gross margin, and 14.17% trailing-12-month revenue growth.
- Management reiterated long-term goals and guided to roughly 13% revenue growth at the midpoint for 2026; 5-year revenue CAGR stands at 22%.
Market and sector impact
- Results and analyst moves influence the cybersecurity sector and enterprise IT spending expectations.
- Broker revisions and valuation metrics affect investor appetite in technology and growth equities.
Risks and uncertainties
- Valuation risk - a P/E of 32.56 suggests investors are paying a premium for Fortinet’s growth, which could pressure the stock if growth slows.
- Cost-pressure risk - increases in memory average selling prices could weigh on margins if product demand softens or price pressures persist.
- Market reaction risk - despite beating EPS and revenue estimates, shares fell in aftermarket trading, indicating potential sensitivity to investor expectations.
Analysts’ updated price targets and ratings reflect continued recognition of the company’s product momentum and renewal trends, while also highlighting the market’s attention to valuation and near-term trading dynamics.