From a horizontal accumulation phase, the timing seems good to buy shares in Palo Alto Networks, Inc. and to get ahead of a break-out on the upside of the congestion area.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
Strengths
● According to sales estimates from analysts polled by Standard & Poor's, the company is among the best with regard to growth.
● Thanks to a sound financial situation, the firm has significant leeway for investment.
● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
● For several months, analysts have been revising their EPS estimates roughly upwards.
● Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.
Weaknesses
● The company has insufficient levels of profitability.
● The company's "enterprise value to sales" ratio is among the highest in the world.
● In relation to the value of its tangible assets, the company's valuation appears relatively high.
● The valuation of the company is particularly high given the cash flows generated by its activity.
● Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.
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Palo Alto Networks, Inc. specializes in the development and implementation of IT security solutions for the enterprise. The group's activity is organized around three divisions:
- managed security services: data center management and storage of data in the cloud, data backup and recovery process management, real-time management and monitoring of IT infrastructure and applications, etc.;
- development of cybersecurity solutions: software solutions for detecting threats and intrusions, protecting against malicious programs, securing data, networks and computer systems (antivirus, anti-spam, web filtering, firewalls, etc.);
- security consulting services: training and updates on threats before, during and after attacks, risk management, etc.
Net sales are distributed geographically as follows: America (68.5%), Europe/Middle East/Africa (19.7%) and Asia/Pacific (11.8%).