Fortinet made a clear statement with its quarterly figures – and not only surprised analysts, but also electrified the stock market.
• Fortinet with a jump in sales and profits in the first quarter
• Convincing forecast for the second quarter and full year
• Fortinet stock on buy lists
The US cybersecurity group Fortinet opened its books on Wednesday after trading closed on the US stock exchanges and presented its results for the first quarter of 2026. With sales of around $1.85 billion, which corresponds to growth of around 20 percent year-on-year, Fortinet continued the momentum of previous quarters. However, the profit development was particularly remarkable. According to the company, adjusted earnings per share grew by 41 percent to $0.82, well above market expectations, which, according to Investing.com, were only $0.62. The company also achieved an operating margin (non-GAAP) of 35.8 percent in the reporting period, which is a record for a first quarter. On a GAAP basis, the operating margin was around 31.4 percent, putting it in the upper range of profitability among the large listed cybersecurity providers.
AI threats as growth drivers
A key driver of the strong quarter was the product business, particularly in the areas of network and firewall hardware. According to a company statement, Fortinet recorded growth of around 41 percent here. In addition, there is a structural trend that is giving the entire industry a boost: the growing importance of cybersecurity in the wake of the Digitalization and the increased use of artificial intelligence. Fortinet is increasingly positioning itself as an integrated platform provider that delivers both hardware and software-based security solutions from a single source.
The company was also able to impress in terms of so-called billings, an important early indicator of future sales: they rose by 31 percent to 2.09 billion US dollars. According to Fortinet founder and CEO Ken Xie, this strong development is due to “the continued convergence of network and security [zurückzuführen]an approach that Fortinet has been spearheading for 26 years, as well as an increasingly complex threat environment that is made even worse by AI.” The cybersecurity group is also benefiting from the current AI boom, which is forcing companies to make further investments in securing their IT infrastructure against the backdrop of increasing threats in the digital space.
Forecast increase as a price driver for Fortinet shares
In addition to the strong quarterly figures, looking ahead also caused additional euphoria in the markets: Fortinet raised its annual forecast and also announced sales for the second quarter that would exceed the previous consensus estimates. Sales of 1.83 billion to 1.93 billion US dollars are expected in the current fiscal quarter, and 7.71 billion to 7.87 billion US dollars for the entire fiscal year.
For the second quarter, management also forecast a non-GAAP operating margin of between 33 and 35 percent, while the expected range for the full year is 33 to 36 percent. This means that Fortinet does not signal any further dramatic expansion in margins, but it does signal a remarkably stable high level of profitability. In an environment of increasing investments in research, cloud integration and AI-based security solutions, this continuity is an important quality feature – especially since many competitors in the industry show significantly greater fluctuations between growth and pressure on margins.
Investors then temporarily caused Fortinet shares to rise by 15.58 percent to $103.96 in pre-market trading on Thursday.
It is precisely the combination of exceeded expectations and increased forecast that is seen as particularly driving up prices on the stock market. Investors interpret them as an indication that growth is intact not only in the short term, but also in the medium term.
Is Fortinet stock still attractive after the price jump?
After the price jump, Fortinet is now trading well above the lows of the last few months. Nevertheless, the valuation in the industry context still appears to be more growth-oriented, but not overheated. The central question for investors is probably not whether Fortinet shares are now too expensive, but rather whether Fortinet can maintain its double-digit growth while maintaining a high margin. Because it is precisely this combination that currently justifies the valuation without aggressively overstretching it.
Carolin Ludwig, editorial team at finanzen.net
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