FTNT Stock On Track To Revisit May Levels Despite Strong Earnings — Analysts Flag Slowing Product Growth, Services Headwinds

• Fortinet Q3 revenue rose 20% to $2.08 billion, while adjusted EPS increased to $0.91.
• BofA downgraded Fortinet to ‘Neutral’, while TD Cowen maintained its ‘Buy’ rating.
• TD Cowen viewed Fortinet’s selloff as unwarranted, citing signs of timing-related services revenue delays rather than weakening fundamentals.

Fortinet (FTNT) shares plunged up to 27% in Thursday's premarket trading, putting the stock on track to revisit levels last seen in late May, a five-month low.

The selloff came despite the cybersecurity company reporting strong third-quarter earnings on Wednesday, with both revenue and adjusted earnings exceeding Wall Street expectations.

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At the time of this writing, FTNT stock was down more than 25% to around $129 in premarket trading.

Fortinet’s Product Revenue Growth Slows 

Fortinet's third-quarter revenue rose 20% year over year to $2.08 billion, compared with $1.72 billion a year earlier. Adjusted earnings per share (EPS) increased 23% to $0.91 from $0.74.

Product revenue increased 37% to $765 million. However, the growth slowed from 52% in the second quarter. 

TD Cowen stated that ramped service activations on large new enterprise deals delayed revenue recognition, according to the note cited by TheFly. However, the firm viewed the post-earnings selloff as unwarranted, noting that several indicators suggested the services revenue delays were timing-related rather than driven by deteriorating fundamentals.

Why Analysts Turned Cautious On FTNT Stock

BofA downgraded Fortinet to 'Neutral' and slashed its price target, following what the brokerage described as a disappointing slowdown. According to TheFly, the firm said third-quarter product and services revenue fell short of expectations, while timing and supply constraints in services reduced visibility.

Barclays also lowered its price target, citing that Fortinet's 37% product revenue growth suggested the second quarter likely marked the peak of the current product cycle.

Fortinet Raises Revenue Outlook, Cuts Services Guidance

Fortinet raised its full-year revenue outlook to $8.125 billion to $8.215 billion, up from its previous forecast of $8.02 billion to $8.18 billion. 

The company also increased its 2026 billings guidance to between $9.568 billion and $9.718 billion, from $9.35 billion to $9.55 billion. 

However, it lowered its services revenue outlook to $5.15 billion to $5.17 billion from $5.18 billion to $5.22 billion earlier.

What Retail Thinks About FTNT Stock

On Stocktwits, retail investors’ sentiment on FTNT stock flipped to ‘extremely bullish’ from ‘bullish’ a day ago, amid ‘extremely high’ message volume. 

So far this year, FTNT stock has surged around 123%. In comparison, the First Trust NASDAQ Cybersecurity ETF (CIBR) and the State Street Technology Select Sector SPDR ETF (XLK), which hold the stock, have risen over 52% and 32%, respectively, over the same period.

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