For the past few months, I found myself entangled in an endless cycle of rolling cash-secured put options on Fortinet. Each expiry came with the same internal decision — collect premium, roll forward, or let assignment happen.
Looking at my past option orders, I have collected around US$780 of premiums from Fortinet without holding a single share.
Eventually, the market made the decision for me. I was assigned Fortinet shares at an effective net cost of US$75.2 per share after factoring in all the premiums collected. What initially felt like a reluctant commitment has, after reflection, evolved into a deliberate long-term investment thesis.
Fortinet is a pure-play cybersecurity company specialising in firewalls, secure networking, zero-trust security and cloud protection. It is not a speculative tech story but rather a core infrastructure service provider in the digital security ecosystem.
As enterprises, governments and cloud providers race to secure increasingly complex networks, Fortinet sits at the intersection of cybersecurity and secure networking — an area that is becoming as essential as electricity and water in the digital economy. Its integrated platform, strong recurring subscription model, and consistent revenue growth of over 15% annually position it as a disciplined compounder rather than a hype-driven stock.
The challenges Fortinet faces are not insignificant. The cybersecurity landscape is intensely competitive, with formidable players such as Palo Alto Networks, CrowdStrike, Zscaler and Check Point constantly innovating and fighting for enterprise budgets. Pricing pressure, product overlap and the rising shift toward cloud-native and SASE (Secure Access Service Edge) architectures have forced Fortinet to continually adapt its business model from traditional hardware-heavy sales to a more subscription-driven ecosystem. Its share price tanked sharply months ago largely due to concerns over slowing billings growth, weaker-than-expected guidance, channel inventory corrections, and fears that customers were delaying large IT security upgrades amid macroeconomic uncertainty. The market interpreted this as a structural slowdown, triggering a swift re-rating despite Fortinet remaining profitable, cash-generative and operationally strong.
However, what the market punished as weakness appears more cyclical than terminal. As inventory normalises and enterprise security spending resumes its secular growth trajectory, Fortinet’s comprehensive platform strategy, strong installed base and disciplined cost control position it well to regain momentum. The correction, while painful, arguably offered long-term investors a rare opportunity to own a resilient cybersecurity franchise at more rational valuations.
The timing of this "forced" purchase aligns with my decision to build up a US growth stock portfolio in my next investment phase.
My effective net cost provides a margin of safety, but more importantly, it anchors me to the idea that great companies are not owned by perfect timing, but by patience and conviction. This assignment is no longer about being “forced” into a position — it is about embracing a role in a business that will likely be more relevant, more profitable, and more entrenched five to ten years from now.
Despite the sharp correction in Fortinet’s share price over recent months, its intrinsic value narrative remains far more reassuring than current sentiment suggests. Using conservative assumptions of 10–12% annual revenue growth, free cash flow margins stabilising around 28–30%, and a moderate discount rate of 9–10%, Fortinet’s intrinsic value is reasonably estimated to fall within the US$90–105 range per share. At current levels, Fortinet trades on a forward P/E in the low-30s, but its PEG ratio sits around 1.2–1.4, indicating that while it is not “cheap,” its valuation remains broadly justifiable relative to its expected earnings growth trajectory. This suggests that an assignment in the low-to-mid US$80s embeds not only a margin of safety, but also entry into a stock whose growth is still reasonably priced when viewed through a longer-term lens.
From a forward-looking perspective, analyst consensus target prices clustering between US$95 and US$115 further reinforce the view that Fortinet’s pullback is more cyclical than permanent. If enterprise cybersecurity spending resumes its secular growth path and Fortinet continues to execute on its platform strategy, a realistic 3–5 year valuation range expands toward US$120–160 per share. In that context, today’s price reflects compressed sentiment rather than impaired fundamentals, positioning patient investors to benefit as valuation converges back toward intrinsic value while earnings continue to compound steadily.
Sometimes, the market nudges you toward better decisions disguised as inconvenience. Fortinet may just be one of those.
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