Is It Time to Dump Palo Alto Networks?

Given the steep rise in Palo Alto Networks' share price, investors can consider booking profits

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Apr 07, 2016
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I have been extremely bullish on the cyber security sector and have been recommending investors to buy several stocks in the sector following the market correction in the first few weeks of 2016. My bullish standpoint has been successful, as all the stocks in the sector are up substantially from the February lows. One of my picks was Palo Alto Networks (

PANW, Financial).

While I still think the future of cyber security sector, and Palo Alto Networks in particular, is bright, investors should consider taking some profits due to the fact that the stock market has risen at a rapid pace.

Leading platform

Last year was very profitable for Palo Alto Networks, but the company is off to a bad start this year. Despite being in red this year, it may have more investors waiting for the company to steer back in the right direction after the great sell off. The company is preparing to lead a new period in cyber security by defending thousands of enterprise, government and service provider networks from cyber risks, and it swanked amazing year over year billing growth.

Apart from this, the company’s security platform securely allows business operations and provides protection grounded on highly secure database and is most important in today’s dynamic computing environments.

Palo Alto Networks’ platform comprises of the latest features that were introduced to aid security specialists to avoid the interruptions and time spent on glitches caused by the high volume of alerts. The main purpose of the company’s platform is to magnify breach avoidance proficiencies and increase operational efficiency.

The company continues to hold a leading position in the cyber security industry with its Wildfire products, which have been the most efficient products in the APT space. Many analysts project robust upside in billing prospective for this year and 2017. As per the recent report, analyst mark for the stock price is set at $193.32.

Not every concern is a spike

According to Bernstein, the old and outdated system of point-based defense contrary to cyber breaches is inadequate to avoid modern cyber threats, and structure security requirements are uniting toward integrated solutions holding cloud-based facilities, endpoint security and next generation firewalls.

Palo Alto Networks agrees with the Bernstein statement. As per the company, its advanced tactic and extremely distinguished cyber threat avoidance services are far greater to point products or legacy. If both Palo Alto Networks and the consensus are correct, this could set up the company for years of superior performance.


While the long-term outlook is still bullish, I think investors should sell the stock after the recent rally and wait for a better entry point in the near future.

Disclosure: I don't hold a position in any of the stocks mentioned in the article.

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