The growth for Palo Alto Networks (PANW, Financial) is primarily driven by three major reasons: first, security is primary to any business requirement and thus driving enhanced security spending; second, the integrated and automated futuristic security platform of Palo Alto Networks is unique and provides supreme prevention abilities in this $16 billion addressable market opportunity; and third, Palo Alto Networks has successfully achieved a worldwide sales coverage model with solid backing of sales team and significant distribution relationships in all the geographic verticals.
New offerings will be catalysts
Palo Alto also advanced its worldwide protect mobility offerings and thus allowing organizations controlled access to enterprise applications and data designed on major policy factors like device, user and application, and it lately declared the key release of its VM series offering support to KBM and Amazon (AMZN, Financial) AWS. Hence, its customers can now enjoy the benefits of the supreme productivity and significant cost advantages of the Cloud with no compromise with their security.
Palo Alto Networks successfully achieved all that was planned for the quarter along with delivering impressive cash flow generation and bottom line results. Palo Alto continues to gain solid market share at an accelerated pace with a robust start for the year and continued growth. Going forward, security is believed to be the major IT spending vertical for all the organizations of all sizes and the security solutions of Palo Alto Networks are estimated to be unique in the market.
Therefore, the highly advanced, integrated, futuristic firewall, unique subscription services and sophisticated endpoint protection offerings of Palo Alto Networks are believed to offer superior security at every point of the network and while used in combination offers advanced security at an extremely competitive total ownership cost.
Conclusion
The company does not have a trailing P/E ratio, indicating that it was in loss. However, the forward P/E looks comparatively better at 84.25 but still it is poorer to the healthy industry’s average P/E of 18.80. It also depicts that the stock for Palo Alto Networks is costly, going forward. The PEG ratio of 3.54, above 1 represent slower growth compared to marginally healthy industry’s average of 1.20.
The profit margin of -37.54% depicts no profit but loss. The revenue per share and diluted EPS of 8.69 and -3.26 respectively suggests poor shareholder earnings. However, the quarterly revenue growth of 50.10% is better than the industry’s average of 39.00% only. The current ratio of 2.59 indicates the robustness of the company’s balance sheet. Finally, the investors are advised to invest into Palo Alto Networks Inc. looking at the solid long-term growth prospects indicated by the CAGR for the next 5 years per annum of 45.98%, better than the industry’s average of 20.56% only and expect promising returns in a long run.
