Fortinet, Inc. (FTNT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

Fortinet, Inc. (FTNT)

View Full Profile →

Intrinsic Value (DCF)

Current$76.32

→

Intrinsic$95.65

+25%

$64.78$95.65$156.98

Market implies 19% growth for 5 years

Growth 25%

Discount 10%

Terminal 3%

FTNT shows 25% potential upside using 25% growth — reasonable if fundamentals hold.

At $76, the market prices in continued high-teens cash flow growth (19%) — likely reflecting buybacks, margin stability, and ecosystem strength.

Range: Bear $65 → Bull $157. Current price implies expectations below the base case, but well above the bear case.

Discount ↓Growth →	21%	23%	25%	27%
8%	$121	$130	$140	$151
10%	$83	$89	$96	$103
12%	$62	$67	$72	$77
14%	$50	$54	$58	$62

Bull Case

Bull case ($157) offers 106% upside at 30% growth, 8% discount
20% margin of safety vs. base case estimate
Market-implied growth (19%) ≤ historical CAGR (25%)

Bear Case

Bear case ($65) implies 15% downside at 20% growth, 12% discount
Using 25% growth — aggressive, watch for mean reversion

Intrinsic Value vs Current Price

5-Year Cash Flow Projection

Loading charts...

5-Year Free Cash Flow Projection

Year 1$2.35B

Year 2$2.94B

Year 3$3.67B

Year 4$4.59B

Year 5$5.73B

Terminal$90.88B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)

Discount Rate9.5%WACC estimate

Terminal Growth3.0%Perpetuity rate

Base Free Cash Flow$1.88BTTM actual

Bear g×0.8, r+2%

Base Historical CAGR

Bull g×1.2, r−1.5%

ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is FTNT stock undervalued or overvalued?

🟡 FAIRLY VALUED

FTNT trades at $76.32, within 10% of our $79.57 intrinsic value estimate. At 9.5% WACC and 25.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $52.12 (bear) to $121.28 (bull).

What is FTNT's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.88B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-1.88B net debt and dividing by 0.77B shares: Bear $52.12 | Base $79.57 | Bull $121.28. Current price $76.32 implies +1% to base case.

How is FTNT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($59.54B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 31.7x.

Fortinet, Inc. (FTNT) Intrinsic Value