Should You Buy, Sell or Hold Fortinet Stock Before Q3 Earnings?

Fortinet FTNT is slated to report third-quarter 2025 results on Nov. 5.For the third quarter of 2025, Fortinet estimates third-quarter revenues in the range of $1.67-$1.73 billion. Non-GAAP EPS is projected in the band of 62-64 cents.The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.7 billion, suggesting year-over-year growth of 12.86%. The consensus mark for earnings is pinned at 63 cents per share, which has been unchanged over the past 60 days. The estimate indicates no year-over-year change.FTNT Estimate MovementImage Source: Zacks Investment ResearchFTNT Earnings Surprise HistoryIn the last reported quarter, the company delivered an earnings surprise of 8.47%. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.19%.Fortinet, Inc. Price and EPS Surprise Fortinet, Inc. price-eps-surprise | Fortinet, Inc. QuoteEarnings Whispers for FTNTOur proven model does not predict an earnings beat for Fortinet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.FTNT has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping FTNT’s Q3 ResultsFortinet faces a mixed outlook heading into its third-quarter 2025 earnings announcement. On the negative side, concerns persist around the company's firewall product refresh cycle and the pace of revenue realization, while intense competition in the cybersecurity market from established players like Palo Alto Networks PANW, Zscaler ZS and CrowdStrike CRWD continues to pressure margins. Macroeconomic uncertainties, including potential economic slowdowns and constrained IT spending, represent additional risk factors that could impact enterprise security budgets during the quarter.However, several positive developments in the quarter under review may have supported performance. In July, Fortinet was recognized as a Leader in the 2025 Gartner Magic Quadrant for SASE Platforms and ranked #1 in the Secure Branch Network Modernization use case in the Critical Capabilities report. Subsequently, in August, the company was named a Leader in the inaugural 2025 Gartner Magic Quadrant for Hybrid Mesh Firewall and positioned highest for Ability to Execute, bringing total recognitions to 12 Magic Quadrant reports. These industry validations are likely to have strengthened competitive positioning in the rapidly growing SASE market. Additionally, Fortinet's AI-driven security solutions, including FortiAI-Protect and FortiAI-Assist, continue contributing to growth, supported by the company's portfolio of more than 500 AI patents. The company's strong momentum in Unified SASE and Security Operations, with second-quarter annual recurring revenue growth of 22% and 35%, respectively, likely continued into the third quarter, positioning Fortinet to potentially exceed conservative guidance ranges.Investors, however, may want to wait for greater clarity before adding to their positions.Top-Line Growth Estimates for Q3Our model estimate for second-quarter 2025 Americas revenues is pegged at $689.4 million, indicating 10.5% growth from the figure reported in the year-ago quarter.Our model estimate for Asia Pacific and Japan revenues is pinned at $338.3 million, indicating growth of 18.8% from the figure reported in the year-ago quarter.Our model estimate for Europe, Middle East and Africa revenues is pegged at $654.6 million, suggesting an 9.2% decrease from the figure reported in the year-ago quarter.Our model estimate for third-quarter 2025 total billings is pegged at $1.804 billion, indicating a 14.1% decrease from the figure reported in the year-ago quarter.FTNT Price Performance & Stock ValuationShares of Fortinet have declined 8.5% in the year-to-date period, underperforming the Computer and Technology sector and the S&P 500 index’s growth of 29.1% and 17.9%, respectively.FTNT’s YTD Price PerformanceImage Source: Zacks Investment ResearchFortinet’s valuation may be a concern for some investors. The stock is trading at a significant premium compared to the broader Zacks Security industry. As of the latest data, FTNT’s Price/Book ratio hovers around 32.14, well above the industry’s 18.52, reflecting investors' high growth expectations. The Value Score of D further reinforces a stretched valuation for Fortinet at this moment.FTNT Trades at a PremiumImage Source: Zacks Investment ResearchInvestment ConsiderationsFortinet presents a compelling but cautiously positioned investment case ahead of third-quarter 2025 results. The company's recent recognition as a Leader in multiple 2025 Gartner Magic Quadrants for SASE and Hybrid Mesh Firewall validates its technological leadership, while strong momentum in AI-driven security solutions and 22% SASE ARR growth demonstrate competitive advantages. However, concerns around firewall refresh cycles and intense competition from Cisco and Palo Alto Networks create near-term uncertainty. With shares trading at a Price/Book ratio of 32.14 and earning a Value Score of D, valuation appears stretched relative to subdued growth expectations.ConclusionFortinet's technological leadership and strong market positioning in SASE and AI-driven security remain intact, supported by multiple Gartner recognitions and robust ARR growth. However, tempered guidance and competitive pressure, combined with a premium valuation, suggest caution. Current shareholders may hold given the company's strong market position, but prospective investors should await a more favorable entry point, potentially following third-quarter results or during market weakness that compresses the valuation premium.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fortinet, Inc. (FTNT): Free Stock Analysis Report Palo Alto Networks, Inc. (PANW): Free Stock Analysis Report Zscaler, Inc. (ZS): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks