Buffett Brain · Research note
Score updated 26 Sept 2026
FTNT· Technology
Fortinet
Fortinet's cybersecurity solutions boast a strong moat with top-quintile margins, but a P/E of 51.8 suggests a stretched valuation.
Buffett fit
Strong fit
Owner
100
Durability
100
Management
69
Price
1
Score updated 26 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned Fortinet entirely, we'd focus on maintaining its strong of 33.9% and leveraging its top-quintile of 31.1%.
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Fortinet's durability is bolstered by its consistent profitability over the last five years and a 5-year EPS CAGR of 34.75%.
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Management has effectively reduced the share count with a 5-year CAGR of -2.31% and a yield of 1.3%, indicating shareholder-friendly practices.
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With an earnings yield of 1.93% and an yield of 2.22%, the current valuation appears stretched.
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- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
8- 1 of 33.9% is in the top quintile for technology, indicating efficient capital use.
- 2 of 80.7% far exceeds the sector top-quintile cutoff of 60.6%.
- 3 of 31.1% is well above the sector's 18.0% top-quintile threshold.
- 4Net margin of 27.5% ranks in the top quintile, highlighting profitability.
Concerns
8- 1 of 51.8 suggests the stock is priced for perfection.
- 2EV/ of 47.4 is significantly higher than typical comfort levels.
- 3 yield of 2.22% indicates a low return at current prices.
- 4Current ratio of 1.15 is below the desired 1.5 threshold for short-term liquidity.
Price history
$171+154.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Fortinet provides integrated cybersecurity solutions, generating $6.8B in revenue with a net margin of 27.5%. The company offers a wide range of products, including FortiGate hardware and software licenses, and FortiSwitch secure switching solutions. Its FortiAnalyzer and FortiManager products provide centralized management and reporting. With an /Net Income ratio of 1.20, the unit economics are robust.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 21, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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