How Did Fortinet Stock Leave Its Industry Behind?
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Over the five years to October 31, 2026, the cybersecurity company Fortinet (FTNT) outperformed 61 of the 68 companies measured against it in the systems software industry. A lead that wide can come from where a company sits or from what it does. Was that the industry at work, or Fortinet itself?
How Far Fortinet Is Ahead Of Its Industry
Fortinet stock rose 102.3% over those five years, while the typical company in its industry fell 51.8%. The industry and sector figures in the table track the median company in each group, of any size, while the S&P 500 figure is the index itself.
| 1-year | 3-year | 5-year | |
|---|---|---|---|
| Fortinet (FTNT) | 57.4% | 137.4% | 102.3% |
| Systems Software industry (median company) | -10.0% | 25.5% | -51.8% |
| Information Technology sector (median company) | -7.2% | 31.2% | -22.1% |
| All stocks in our data (median company) | 1.7% | 30.3% | -2.7% |
| S&P 500 index | 11.1% | 80.7% | 64.3% |
Total return to 2026-10-31, including dividends; the S&P 500 row is the index level, price only. Industry, sector and all-stock rows are the median company of each group.
Fortinet did not finish first in its industry; CrowdStrike, one of the larger companies in the group, rose 255.5%. But Fortinet left the typical systems software company far behind.
Was It Fortinet’s Industry?
No, only the broad index rose with Fortinet. The S&P 500 index rose 64.3% over the five years, even as the typical stock among all those in our data fell 2.7%. Fortinet still finished well ahead of the index.
Fortinet’s own sector and industry did far worse. The typical information technology company fell 22.1%, and systems software ranked last of the 12 industries in the sector by the five-year return of its typical company. So Fortinet’s stock rose while most of its own industry lost ground.
What Did Fortinet’s Business Do?
Over five years, Fortinet grew its earnings per share far faster than its sales. The company’s sales have grown only a little faster than its industry’s, with revenue growth averaging 15.1% a year over the last three years against 13.6% for the typical systems software company.
Measuring each year as the twelve months to the end of September, Fortinet’s revenue rose 152.1% between 2021 and 2026, but its earnings per share rose 369.5%. Its operating margin widened from 19.3% to 33.0%. Its diluted share count also fell 11.4%, so each share holds a bigger slice of a larger profit.
Investors did not pay a higher multiple for those earnings. Fortinet stock traded at 86.1 times earnings at the end of September 2021 and trades at 43.8 times today. That is close to the 40.6 times for the typical company in its industry. So Fortinet’s stock rose on its earnings, while the multiple on them shrank.
Fortinet sells security products and attaches security subscriptions and technical support to them. In fiscal 2025, security subscriptions brought in 38.7% of its revenue, products 32.6%, and technical support and other 28.6%.
Is Fortinet Still Ahead Over The Past Year?
Yes. Over the year to October 31, 2026, Fortinet stock did better than 71 of its 86 industry peers, a smaller share than over the five-year period. That count already incorporates the stock’s 23.9% fall during October.
Reporting its fiscal Q3 2026 results on October 28, management raised its forecast for the adjusted operating margin for 2026 to 37.0% at the midpoint, from 36.0% in July. It also cut its 2026 service revenue forecast to $5.16 billion at the midpoint, from $5.2 billion, and the stock fell 20.1% the next day. Management also said rising costs were weighing on the gross margin on products in the second half of the year, while the gross margin on services was picking up.
As reported, the company’s operating margin rose to 33.9% in fiscal Q3 2026, up from 31.7% a year earlier. Fortinet’s operating margin is the figure to watch when the company next reports, expected in February 2027.
How To Act On FTNT?
Not necessarily on Fortinet alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Fortinet is one. Over the five years to October 2026, its stock rose 102.3%, ahead of 61 of the 68 other companies in Systems Software, where the typical company fell 51.8%.
Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.
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