By Peet Serfontein & Motheo Tlhagale
Fortinet Inc. is a multinational corporation headquartered in the United States (US) that specialises in cybersecurity and networking solutions. Its product offerings consist of core platform network security products and enhanced platform technology products that span physical appliances, virtual appliances, software, and cloud-hosted services.
Fortinet's offerings are often incorporated into an organisation's broader security infrastructure to help protect against various cyber threats such as malware, ransomware, and unauthorised data access.
Cybersecurity is an underappreciated theme. Cyberattacks on computer networks and infrastructure have intensified, and these attacks have become more widespread. To curb these threats, organisations are prioritising cybersecurity spending. The increase in online commerce, cloud workloads, and data (including AI capacity) requires more protection, which supports the investment case for cybersecurity stocks.
The price action demonstrates a consistent pattern of symmetric movement over time, characterised by well-defined peaks and troughs within structured upward cycles. The formation of wave five, the final impulsive leg of the Elliott Wave Cycle, along with strengthening momentum, makes for a compelling investment opportunity (see the number notation on the chart).
The stock is trading above its 200-day simple moving average (SMA). This sustained positioning above a key long-term trend indicator suggests underlying strength and investor confidence.
Fading downside momentum, as indicated by the MACD histogram, further supports the bullish outlook. However, the weakening trajectory of the On-Balance Volume (OBV) indicator raises some concern regarding the underlying strength of the price.
| Share Information | |
|---|---|
| Share Code | FTNT |
| Industry | Software & Services |
| Market Capital (USD) | 80.32 billion |
| One Year Total Return | 76.41% |
| Return Year-to-Date | 11.06% |
| Current Price (USD) | 104.93 |
| 52 Week High (USD) | 114.82 |
| 52 Week Low (USD) | 54.57 |
| Financial Year End | December |
| The share price is up strongly year-to-date. With a beta of 1.37 we expect higher volatility compared to the market. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (USD) | 2.37 | 2.48 | 2.82 | 3.21 |
| Growth (%) | 4.68 | 13.38 | 13.74 | |
| Dividend Per Share (USD) | 0.00 | 0.00 | 0.00 | 0.00 |
| Growth (%) | ||||
| Forward PE (times) | 42.29 | 37.16 | 32.67 | |
| Forward Dividend Yield (%) | 0.00 | 0.00 | 0.00 | |
| Growth expectations are decent medium term, with demand bolstered by positive secular trends. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long-term Fundamental view
| Share Name and Position | BKR - Buy (Continue to hold) |
CMG - Buy (Continue to hold) |
ETN - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 40.11 | 54.65 | 334.86 |
| Current Price | 38.99 | 53.95 | 362.11 |
| Movement | -2.8% | -1.3% | +8.1% |
| Comment | The price is holding above support within a rising wedge but is below the 200-day SMA. Momentum has stalled. Target remains $45.00, with a stop-loss at $38.50. | A wave five formation remains of interest, but the price has dipped below the 200-day SMA, and momentum has stalled. Target is $64.00 with a stop-loss at $51.00. | Wave b development remains of interest, with price holding above the 200-day SMA. Momentum has stalled, raising concern. Target is $395.00, with a trailing stop at $338.00. |
| Time to exit | 22 September 2025 | 17 October 2025 | 28 April 2026 |
| Share Name and Position | MET - Buy (Continue to hold) |
ABBV - Buy (Continue to hold) |
MSI - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 79.32 | 185.72 | 422.93 |
| Current Price | 76.21 | 186.39 | 408.73 |
| Movement | -3.9% | +0.4% | -3.4% |
| Comment | A rising wedge remains of interest, though below the 200-day SMA in a counter-trend setup. Momentum has stalled. Target is $89.00, with a stop-loss at $74.00. | The price is in an upward channel and continues to test the 200-day SMA in a counter-trend setup. Downside momentum is a concern. Target is $216.00, with a stop-loss at $174.00. | A wave five setup remains of interest, though the price is below the 200-day SMA in a counter-trend strategy. Momentum has stalled. Target is $476.00, with a stop-loss at $402.00. |
| Time to exit | 29 August 2025 | 20 August 2025 | 13 August 2025 |
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