Fortinet: A Decade-Low Forward P/E and Strategic Buybacks Signal a Strategic Entry Point

In the ever-evolving landscape of cybersecurity and cloud infrastructure, Fortinet (FTNT) has emerged as a pivotal player, navigating both technological shifts and market dynamics with a strategic focus on shareholder value. As of September 2025, Fortinet's forward price-to-earnings (P/E) ratio stands at approximately 34.64, according to MacroTrends, a figure that starkly contrasts with its 10-year historical average of 137.57, according to FullRatio. This decade-low valuation, coupled with an aggressive share buyback program and robust long-term growth prospects in the Secure Access Service Edge (SASE) market, positions Fortinet as a compelling investment opportunity.

Valuation Dislocation: A Historical Perspective

Fortinet's current forward P/E ratio represents a significant dislocation from its historical norms. For context, the company's P/E ratio peaked at 623.4 in 2015, per MacroTrends, a reflection of its early-stage growth challenges and low earnings. Over the past decade, however, Fortinet has transformed its financial profile, with the 2024 forward P/E ratio at 41.44 and the 2025 figure dropping further to 31.68, according to FullRatio. This decline underscores improved earnings performance relative to its stock price, creating a valuation gap that appears misaligned with its fundamentals.

The dislocation is further amplified by Fortinet's position relative to its peers. The Technology sector's average forward P/E ratio is 32.17, according to FullRatio, meaning Fortinet is trading at a slight discount despite its leadership in cybersecurity and SASE. This divergence suggests that the market may be underestimating Fortinet's long-term potential, particularly as it diversifies into cloud-native solutions and AI-driven automation, according to Mordor Intelligence.

Strategic Buybacks: Enhancing Shareholder Value

Fortinet's recent decision to expand its share repurchase program by $1 billion-raising the total authorization to $9.25 billion through February 2027-was reported by Nasdaq, and demonstrates management's confidence in the company's financial health and future earnings. With $3.37 billion in cash and cash equivalents as of June 2025, per Nasdaq, Fortinet has the liquidity to sustain this program without compromising its operational flexibility.

Share buybacks can artificially inflate earnings per share (EPS) by reducing the share count, making Fortinet's earnings appear more robust. While critics argue that buybacks are most effective when executed at undervalued prices, data from FinanceCharts suggests Fortinet's current forward P/E of 34.64 is already below its historical average and sector peers. This suggests that the company is leveraging its strong balance sheet to reward shareholders while maintaining a disciplined approach to capital allocation.

The impact on EPS is not yet quantified in the latest quarterly report (August 2025), which showed EPS of $0.64, according to MarketBeat, but historical data indicates that buybacks have consistently contributed to EPS growth. For instance, between 2019 and 2023, Fortinet's share count decreased by 12%, coinciding with a 25% rise in EPS, per FinanceCharts. If the 2024–2025 buyback program follows a similar trajectory, investors could see a meaningful boost to earnings metrics.

Long-Term Growth: SASE and Beyond

Fortinet's strategic pivot to SASE is a critical driver of its long-term growth. The SASE market, valued at $7.9 billion in 2024, is projected to reach $39.4 billion by 2034, according to Mordor Intelligence, driven by the integration of cloud-native security solutions. Fortinet, alongside competitors like Zscaler and Cisco, is capitalizing on this trend by expanding its SASE infrastructure, including a recent point of presence (PoP) in Auckland, New Zealand, reported by ChannelLife.

While specific market share percentages for Fortinet in 2025–2034 are not disclosed, the company is among the top six SASE vendors, capturing 72% of the $2.4 billion market in 3Q 2024, according to DellOro. Its acquisition of Lacework and integration of 225 AI patents has further solidified its competitive edge, as noted by Mordor Intelligence. With a 5-year revenue growth forecast of 13.23% and EPS growth of 10.01%, according to WallStreetNumbers, Fortinet is well-positioned to outperform broader market trends.

Conclusion: A Strategic Entry Point

Fortinet's decade-low forward P/E ratio, combined with its strategic buybacks and leadership in the high-growth SASE market, creates a compelling case for investors. The valuation dislocation appears to reflect short-term market skepticism rather than long-term fundamentals, particularly as the company continues to innovate in cloud and AI-driven security. For investors seeking exposure to a cybersecurity leader with disciplined capital management and robust growth prospects, Fortinet offers a strategic entry point at a historically attractive valuation.