Fortinet (NASDAQ:FTNT) Stock Price Crosses Below 50 Day Moving Average on Analyst Downgrade

Key Points

• Fortinet shares fell below their 50-day moving average, trading as low as $127.40 and last changing hands at $139.10 after TD Cowen cut its price target from $225 to $190, despite maintaining a buy rating.
• Analyst sentiment is mixed, with Fortinet carrying an average “Hold” rating and a consensus price target of $149.61; Barclays and Citigroup also lowered their targets.
• Fortinet reported strong third-quarter results, including 20.5% year-over-year revenue growth and earnings above expectations, but slower services growth and reduced services guidance raised concerns about future momentum and contributed to the selloff.

Fortinet, Inc. (NASDAQ:FTNT - Get Free Report) shares passed below its 50-day moving average during trading on Thursday after TD Cowen lowered their price target on the stock from $225.00 to $190.00. The stock has a 50-day moving average of $171.64 and traded as low as $127.40. TD Cowen currently has a buy rating on the stock. Fortinet shares last traded at $139.10, with a volume of 17,323,503 shares trading hands.

Several other equities research analysts have also weighed in on the company. BMO Capital Markets increased their target price on Fortinet from $170.00 to $185.00 and gave the stock a "market perform" rating in a research report on Thursday, July 30th. Sanford C. Bernstein reaffirmed a "market perform" rating and issued a $145.00 price objective (up from $102.00) on shares of Fortinet in a research note on Thursday, September 17th. Robert W. Baird set a $165.00 price objective on Fortinet and gave the stock a "neutral" rating in a report on Thursday, July 30th. Barclays decreased their target price on shares of Fortinet from $210.00 to $155.00 and set an "equal weight" rating for the company in a research note on Thursday. Finally, Citigroup reduced their price target on Fortinet from $185.00 to $140.00 and set a "neutral" rating for the company in a research report on Thursday. One investment analyst has rated the stock with a Strong Buy rating, ten have given a Buy rating, twenty-four have given a Hold rating and six have issued a Sell rating to the company. According to data from MarketBeat, Fortinet presently has an average rating of "Hold" and an average price target of $149.61.

Insider Buying and Selling at Fortinet

In other news, CEO Ken Xie sold 161,482 shares of the company's stock in a transaction that occurred on Monday, August 3rd. The stock was sold at an average price of $162.66, for a total value of $26,266,662.12. Following the sale, the chief executive officer directly owned 52,972,372 shares in the company, valued at approximately $8,616,486,029.52. This represents a 0.30% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, VP Michael Xie sold 3,121 shares of the stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $162.63, for a total value of $507,568.23. Following the transaction, the vice president owned 9,918,360 shares of the company's stock, valued at $1,613,022,886.80. This represents a 0.03% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last ninety days, insiders have sold 221,303 shares of company stock valued at $36,164,034. 17.60% of the stock is currently owned by corporate insiders.

Key Fortinet News

Here are the key news stories impacting Fortinet this week:

• Positive Sentiment: Fortinet reported third-quarter revenue of $2.08 billion, up approximately 20% year over year, while adjusted EPS of $0.91 exceeded expectations. Billings increased 29% to $2.34 billion, and management raised its overall 2026 revenue outlook. Fortinet Reports Strong Third Quarter 2026 Financial Results
• Positive Sentiment: Product revenue grew 37% to $765 million, operating margins reached record levels, and the board authorized an additional $1.2 billion for share repurchases. Strong free cash flow and rising deferred revenue could support future services growth. Fortinet Raises Guidance Again
• Neutral Sentiment: Management attributed the services slowdown partly to customers deploying security hardware for AI and data-center projects before activating related recurring services. Investors will watch whether those deployments convert into service revenue in coming quarters.
• Negative Sentiment: Services revenue rose only 13% to $1.31 billion, significantly below product growth, and Fortinet lowered its services-revenue forecast. Analysts cited slowing product momentum and services headwinds, with multiple firms cutting price targets or downgrading the stock. Fortinet Stock Sinks
• Negative Sentiment: Fourth-quarter revenue guidance implies growth of roughly 15%, below the third quarter’s pace. Normalizing pricing benefits, higher inventory costs, and a valuation near 49 times earnings amplified the market’s reaction. The selloff also pressured other cybersecurity and software stocks amid broader concerns about AI disruption. Software Stocks Slide After Fortinet Results

Institutional Investors Weigh In On Fortinet

A number of hedge funds have recently made changes to their positions in the company. Transamerica Financial Advisors LLC bought a new stake in shares of Fortinet during the 2nd quarter valued at approximately $492,000. Wealth Enhancement Trust Services Inc. boosted its position in Fortinet by 83.8% in the third quarter. Wealth Enhancement Trust Services Inc. now owns 22,326 shares of the software maker's stock valued at $3,991,000 after buying an additional 10,180 shares in the last quarter. QRG Capital Management Inc. boosted its position in Fortinet by 21.4% in the first quarter. QRG Capital Management Inc. now owns 75,491 shares of the software maker's stock valued at $6,169,000 after buying an additional 13,294 shares in the last quarter. Vista Investment Partners LLC boosted its position in Fortinet by 53.1% in the second quarter. Vista Investment Partners LLC now owns 49,058 shares of the software maker's stock valued at $7,537,000 after buying an additional 17,018 shares in the last quarter. Finally, Farther Finance Advisors LLC grew its stake in shares of Fortinet by 35.5% during the third quarter. Farther Finance Advisors LLC now owns 32,402 shares of the software maker's stock worth $5,792,000 after buying an additional 8,488 shares during the last quarter. Institutional investors and hedge funds own 83.71% of the company's stock.

Fortinet Stock Down 20.1%

The company has a market capitalization of $102.06 billion, a price-to-earnings ratio of 45.16, a P/E/G ratio of 3.25 and a beta of 1.03. The company has a debt-to-equity ratio of 0.32, a current ratio of 1.28 and a quick ratio of 1.19. The firm's fifty day moving average price is $171.64 and its 200-day moving average price is $127.99.

Fortinet (NASDAQ:FTNT - Get Free Report) last issued its quarterly earnings data on Wednesday, October 28th. The software maker reported $0.91 earnings per share for the quarter, topping analysts' consensus estimates of $0.86 by $0.05. The business had revenue of $2.08 billion for the quarter, compared to analyst estimates of $2.06 billion. Fortinet had a return on equity of 182.65% and a net margin of 28.96%. Fortinet's quarterly revenue was up 20.5% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.74 EPS. Sell-side analysts expect that Fortinet, Inc. will post 3.10 earnings per share for the current fiscal year.

About Fortinet

Fortinet, Inc develops cybersecurity products and services designed to protect networks, endpoints, applications, cloud environments and operational technology systems. The company's portfolio includes next-generation firewalls, secure networking products, endpoint security, web application security, email security, identity and access solutions, and security information and event management tools.

Its product offerings include FortiGate network security appliances and cloud-based firewalls, along with FortiSwitch, FortiAP and FortiExtender solutions for secure connectivity.

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