Palo Alto Networks
This company has been a momentum trader’s dream over the past two years, and we covered the love that analysts spread on the stock earlier this month after the huge earnings. Palo Alto Networks Inc. (NASDAQ: PANW) is helping to lead a new era in cybersecurity by protecting thousands of enterprise, government and service provider networks from cyber threats, and it boasted staggering year-over-year billing growth. Unlike fragmented legacy products, its security platform safely enables business operations and delivers protection based on what matters most in today’s dynamic computing environments: applications, users and content.
Palo Alto Networks security platform has new features that were recently introduced that help security professionals overcome the distractions and time spent on problems caused by the overwhelming volume of alerts and manual processes associated with operating many discrete security products and instead expand breach prevention capabilities and boost operational efficiency.
The company blew away earnings and any macro sector concerns that investors and Wall Street may have harbored toward the new revolution vendors and security were sent packing as the company produced yet another impressive beat-and-raise quarter. Billing revenue and the bottom-line revenues smashed the street’s estimates as the company continues to dominate the sector. Huge top-line numbers and stellar gross margins were the reason for the big upside in earnings.
The best thing for investors is this was against already tough comparisons, and with the demand for security continuing almost unabated the company could be poised for years of incredible growth. Palo Alto continues to be ranked the highest with the Wildfire product, which has been the favorite in the Advanced Persistent Threat (APT) space among the value added resellers who carry and sell the product. Toss in 20% upside in billing for the quarter, and the story is a killer going forward.
Lastly, other analysts on Wall Street have made it clear that the feedback they got from the professionals at recent security conferences was the most bullish on Palo Alto, and the company is gaining real traction with larger data centers firewalls.
Stifel has a $200 price target, and the consensus target is $193.20. The stock closed trading Tuesday at $180.77.
The older legacy vendors like Checkpoint and Symantec are losing ground to these and other top companies in the sector, and they will continue to unless they update their offerings to compete with newer technology and innovation in an increasingly competitive field.
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