Is Palo Alto Networks Not a Good Buy Anymore?

Cyber security is a continuously changing industry, as with time, new threats and tricks are evolved to breach the security of large government and private organizations. Due to this, it cannot be certainly said which firm will be an industry leader in the imminent years. In the case of cyber security companies, their work is not only to guard their clients from threats, but also to develop new solutions to be prepared for new threats that can arise at any point of time.

However, since the industry is growing rapidly, investors can still benefit from it by picking the right stocks in the short term.
Currently, Palo Alto Networks (PANW) is the market leader and although there’s a good chance that the company will be dethroned in the future, it still shouldn’t stop investors from benefiting from the positive trends in the short-term

Palo Alto Networks is a worldwide cyber security company that brags about free cash flow production that is stunning. The company’s free cash flow surged to more than $315 million in the previous year from approximately $50 million in FY14. Moreover, Palo Alto Networks’ addressable market is predicted to surge at a robust rate, providing it a substantial opportunity to carry on its amazing top-line growth.

In addition, network securities endure to take advantage of numerous companies adopting Big Data by gathering and binding their clients data, and this will eventually result in growing demand for cyber security solutions as well. According to the Gartner estimates, the security software market will reach more than $21.4 billion worldwide in the next few years.

Security information management, enterprise data security, and secure web gateway accounts for some of the highest growth sub divisions in the cyber security industry. As a matter of fact, the company has a benefit from its pure play standpoint in network security, permitting it to place its attention on next generation firewall and associated products proposing as its chief priority.

While Palo Alto Networks is performing very well, its two foremost competitors Cisco and Juniper are facing problems in advancing their products mainly due to the lack of emphasis in areas that Palo Alto Networks specializes in. The company is capable of identifying, securing, and eliminating cyber threats inside a network without obstructing its process and efficiency.

Consequently, I think Palo Alto Networks has a very strong moat and should continue being a market leader at least for the short-term. Thus, I think investors can benefit from the growth of the market by buying Palo Alto Networks.
Published on Aug 9, 2016
By Prudent Investor

Copyrighted 2016. Content published with author's permission.

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