Fortinet just took a heavy hit, dropping over 3% in a single day. This is after a brutal slide from its 52-week high of $114.82. The stock now sits around $72.89, flirting with its 52-week low of $67.98.

What happened? The cybersecurity giant delivered results that could not live up to the lofty expectations baked into its price. Forward guidance came in soft and investors are questioning whether Fortinet can sustain its growth pace in a competitive, fast-evolving market.

At a P/E near 29 and a P/B over 27, the valuation is still not “cheap” by any stretch. This means the market was pricing in near-flawless execution and the latest earnings call just cracked that perfection narrative.

Yes, Fortinet remains a strong player with high ROE and solid margins, but high valuations can turn from friend to foe when growth slows. If sentiment continues to shift from “hyper-growth” to “show-me results”, we might not have seen the bottom yet.

Sometimes, the most dangerous time to hold is not when a company is bad, but when the story changes.