The rapid digital transformation that is taking place across industries globally has exposed cloud data to advanced security risks. Thus, cyber security has become a mission-critical need of the hour. In this space, network security leader Palo Alto Networks (PANW) is benefiting from the strong demand for its innovative next-generation security platforms.
Merits that are Driving Growth
The company’s patented security platform with traffic classification engine — App-ID—identifies network traffic by application, user and content, thus providing in-depth visibility into all traffic and applications. This helps organizations monitor a user’s content, risks and threats.
Importantly, Palo Alto’s security platforms eliminate the need for multiple security products for different areas of concern and bring end-to-end security under one umbrella. This is driving the rapid growth of the company.
Significantly, the market capitalization of the Palo Alto stock is around $53 billion currently, making it one of the largest companies in the world. It was not surprising when Palo Alto announced earlier this month that it has joined the Nasdaq-100 Index, and is counted among the 100 largest global non-financial companies listed on the Nasdaq exchange.
Insider Activity Encouraging
Another interesting input that is sure to catch investors’ eyes is Palo Alto insider transactions, which show that there have been more purchases of shares by insiders of Palo Alto than dispositions.
This is likely to buoy investor confidence in the company. This is because when one sees more insider buys in a company, they believe the company’s prospects are strong and the stock prices are likely to go further up.
Experts Opine
The growing strength of the company has earned a Strong Buy consensus rating from Wall Street analysts, based on 21 Buys, 2 Holds, and 1 Sell.
Following Palo Alto’s first-quarter fiscal 2022 print last month, Stifel analyst Adam Borg reiterated a Buy rating on the Palo Alto stock, and raised the price target to $600 from $560. Borg was encouraged by the healthy demand environment, fueled by heavy spending on cybersecurity across industries. He was also upbeat about the company’s solid operational execution and ongoing hardware refreshes, despite supply-chain constraints, which were a top-line booster.
“We continue to believe Palo Alto is well-positioned across its Network, Cloud, and SecOps focus areas and has a number of drivers to sustain at-least low 20%+ top-line growth and operating margin and FCF expansion in coming years. We also believe Palo is well-positioned to be a natural consolidator of cybersecurity spend,” observed the analyst.
According to the PANW stock price prediction, the price target is $612.29 on average, indicating a 13.89% upside to the present share prices.
Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >
