FTNT
Fortinet
Recurring SaaS
★ Quality 84/100Price today
$156.63
what the market pays
Worth
$95.64
calculated cycle value
Price is 64% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and subscriptions
$93.03
per share
How it's calculated
Fortinet — high assistant path (2026-06-06). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Recurring SaaS · vs 26 peers
You pay 45.9x times this business's cash flow; its sector median is 20.3x.
40% above what Charlie thinks it's worth (27.7x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $3.35/share × 27.7x multiplier plus $2.61 in net cash = $95.64 in intrinsic value. Today's price of $156.63 is 39% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 64% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $90.86.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$76.51
-20% off Value
🟡 Discounted
≤$90.86
-5% off Value
🔴 Today
$156.63
-39% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Fortinet installs its lock on your network and charges you to maintain it.
Fortinet sells network cybersecurity: physical firewalls (FortiGate) plus a growing layer of software and cloud services. The hardware hooks the customer; the recurring money comes via security subscriptions and support. Of $6.8B in 2025 revenue, most is already recurring with 80% gross margin.
Its proprietary ASIC (SPU chip) gives it firewalls that are faster and cheaper per watt than competitors relying on generic CPUs. Once installed on the network, switching firewall providers is expensive and risky, which sustains renewals. It's not a monopoly: Palo Alto and Cisco fight over the same ground.
Revenue history
From $3.3B to $6.8B in 4 years — nearly 2.1x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $6.8B · FY2025
Of every $100 in sales, $73 goes to costs and operations; $27 is left as net profit (27% margin).
Catalysts and risks
Migration of firewalls bought in 2020-2021 reaching end of life in 2026, forcing a refresh cycle.
FCF of $2.6B on $6.8B of revenue: conversion that gives ammunition for buybacks and SASE.
Growth of unified subscriptions (SASE/SecOps) toward a target of a $50B market by 2030.
Dependence on the hardware cycle: if companies extend the life of the FortiGate, revenue becomes irregular.
Palo Alto and Cisco with broader platforms can compress prices and margins.
The model itself admits the moat is not strong; the ASIC advantage erodes if the cloud replaces the physical firewall.
Charlie's note
“Paying almost 28x for a business growing 19% with 80% gross margin and a real moat in its proprietary ASIC is reasonable, not a giveaway; the chip and the cost of switching firewalls sustain renewals, so the discipline is in waiting to pay the multiple, not the story.”
Analysis · June 2026
So when would be a good price for Fortinet?
By our calculation, not yet. We will email you the day it drops to $90.86 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.