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Fortinet: A Unique Opportunity to Get Paid for Investing in Cybersecurity

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  //stocks-investing.news-articles.net/content/202 .. -to-get-paid-for-investing-in-cybersecurity.html
  Published in Stocks and Investing on Friday, January 2nd 2026 at 12:38 GMT by Forbes

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

Fortinet: A Unique Opportunity – Getting Paid to Invest in Cybersecurity (and Understanding Why)

The cybersecurity landscape is perpetually fraught with risk, but sometimes those risks translate into unique investment opportunities. A recent Forbes article by Michael Bagel highlights just such a situation surrounding Fortinet (FTNT), a global leader in network security solutions. The piece argues that investors can essentially be paid to buy FTNT stock at a significant discount due to a complex interplay of factors, primarily revolving around a convertible note offering and investor sentiment reacting to short-term challenges.

The Core Mechanism: Convertible Notes & the “Put” Option

At the heart of this unusual situation lies Fortinet’s $1 billion convertible notes offering announced in late 2024 (and detailed further on their Investor Relations page). These notes, issued with a 3.5% coupon rate, are designed to be converted into Fortinet common stock at a conversion price of $67.84 per share. The crucial point is that this conversion price sits below the current market price of FTNT. As of early January 2026 (the article's publication date), FTNT was trading around $71-$73, creating an immediate "put" option for noteholders – they can choose to hold the notes and receive interest payments or convert them into stock at a favorable price.

Bagel explains that this structure effectively incentivizes investors to buy Fortinet stock now in anticipation of future conversion. Why? Because if the stock price remains above $67.84, holding the notes becomes more valuable than letting them mature and simply receiving interest. This creates demand for FTNT shares, theoretically supporting (or even pushing up) the current price.

The Short-Term Headwinds & Investor Overreaction

While the convertible note offering presents a potential tailwind, Fortinet has faced short-term headwinds that have contributed to investor anxiety and the discount. The Forbes article points to several factors:

• Macroeconomic Uncertainty: Concerns about a slowing global economy and potential recessionary pressures have dampened overall market sentiment, impacting even robust companies like Fortinet.
• Geopolitical Risks: Increased geopolitical tensions (specifically mentioning ongoing conflicts in Eastern Europe and rising China-Taiwan relations) heighten the demand for cybersecurity but also introduce uncertainty that investors find unsettling. Fortinet's significant exposure to international markets makes it particularly vulnerable to these shifts.
• Guidance Concerns & Subscription Model Transition: Fortinet’s recent earnings calls have been marked by cautious guidance, partly due to a shift towards a subscription-based revenue model. While this transition is expected to be positive long-term (as recurring revenue streams are generally valued higher), the initial impact has involved some churn and slower billings, leading to investor disappointment. As explained in their Q3 2025 earnings release, the subscription model aims for greater customer lifetime value but requires navigating a period of adjustment.
• Competition: While Fortinet remains a dominant player, competition within the cybersecurity space is intensifying. Companies like Palo Alto Networks and CrowdStrike are aggressively vying for market share, putting pressure on pricing and margins.

The article argues that these concerns, while valid to some extent, have been overblown by the market, leading to an unwarranted discount in Fortinet's valuation relative to its long-term growth prospects. Bagel suggests investors are focusing too much on the short-term challenges and overlooking Fortinet’s fundamental strengths.

Fortinet’s Strengths: Why the Long View Matters

Despite the current headwinds, Fortinet possesses several key advantages that support a positive long-term outlook:

• Market Leadership: Fortinet is consistently recognized as a leader in the network security space by industry analysts like Gartner and Forrester. Their broad product portfolio – encompassing firewalls, intrusion prevention systems, endpoint protection, and more – provides a comprehensive cybersecurity solution for businesses of all sizes.
• Recurring Revenue Model: The transition to a subscription-based model is expected to provide greater revenue predictability and higher margins over time.
• Strong Customer Relationships: Fortinet boasts a loyal customer base with high retention rates, demonstrating the value proposition of their solutions.
• Innovation & R&D Investment: Fortinet consistently invests heavily in research and development, ensuring they remain at the forefront of cybersecurity innovation. Their Security Fabric platform continues to evolve, integrating new technologies and addressing emerging threats.
• Secured by Design Approach: Fortinet's "Security-Driven Networking" approach emphasizes a holistic, integrated security architecture which resonates with enterprise clients.

The Investment Thesis: A Patient Investor’s Opportunity

Bagel concludes that the combination of the convertible note offering (effectively providing a floor for the stock price) and the market’s short-term pessimism creates a compelling investment opportunity for patient investors. He suggests that those willing to look beyond the immediate challenges can potentially benefit from:

• Price Appreciation: As investor sentiment improves and Fortinet executes its strategic initiatives, the stock is likely to appreciate.
• Potential Conversion Gains: If the stock price rises above $67.84, noteholders will convert their notes into shares, further driving demand for FTNT.
• Dividend Income: Fortinet pays a dividend, providing investors with an additional source of income while they wait for the stock to appreciate.

Important Considerations & Risks

The Forbes article also acknowledges the risks involved:

• Continued Macroeconomic Weakness: A significant and prolonged economic downturn could negatively impact Fortinet’s business.
• Increased Competition: Intense competition could erode margins and market share.
• Geopolitical Escalation: Further escalation of geopolitical tensions could disrupt Fortinet's operations and customer relationships.

Ultimately, the article paints a picture of Fortinet as a company facing temporary headwinds but possessing strong fundamentals and presenting a unique opportunity for investors willing to embrace a long-term perspective – an opportunity where you are essentially being "paid" to buy into a leading cybersecurity player at a potentially discounted price.

Disclaimer: This is a summary based on the provided article and does not constitute financial advice. Investors should conduct their own research and consult with a qualified professional before making any investment decisions.