This Multi-Billion Dollar Opportunity Makes Palo Alto Networks a Buy
The cyber security market is growing at a brisk pace as the market is now worth around $105 billion. However, analysts are expecting strong growth in the sector going forward as the market is estimated to be worth over $170 billion by 2020. The strong expected-growth will be a huge driving factor for cyber security stocks, and Palo Alto Networks looks the best stock in the industry. Unlike many of its peers, Palo Alto Networks has been winning market share and is also profitable.
Despite the increasing competition in the cybersecurity industry, the company is performing very well and is gaining traction in the sector.
In spite of Palo Alto Networks’ comparatively large size, the company is still growing at a higher rate compared to its rivals. As a matter of fact, the company experienced its great year-over-year growth figures in Q1 since debuting on the community markets.
Palo Alto Networks’ clients list increased 35% to 26,000 in 2015. Palo Alto Networks added a record of 2,000 clients throughout Q4, as the rate of adding customers in its portfolio is not decelerating by any means.
Furthermore, the average value of individual clients is also mounting for the company. For example, a client, to become one of the company’s uppermost 25 clients, has to spend a minimum of $9.2 million. This clearly justifies that customer satisfaction is also enhancing at a faster rate, as $9.2 million figure improved by a 60% versus the prior year.
The company appears entirely unaffected by the increasing competition, while most of Palo Alto Networks major rivals have not been familiar with the increasing competition in the industry. Palo Alto has done a great job of exploiting on rising cybersecurity concerns.
As per the Identify Theft Resource Centre, the company dealt with around 670 data breaches this year, and the average charge of a data breach is up 23% in the prior two years. Palo Alto Networks brags some of the most progressive cybersecurity technologies available and carry on to improve its products with innovations and new technology partnerships. The company should linger to focus on innovation to sustain its inflated growth rate for future.
Palo Alto Networks’ business is growing rapidly and I expect it to continue as the cyber security market is still expanding. With high-profile breaches being a regular thing, cyber security stocks are intended to move higher. Being the leader, Palo Alto Networks is the best-positioned stock to benefit from this uptrend.