Tuesday, December 5

Palo Alto Networks: Topped $100B, Now What?

After a bumpy road to the top, one of our all-time favorite picks Palo Alto Networks ($PANW) hit our price target within 6 months -- demonstrating their complete domination over the cybersecurity space. Not only that, but PANW briefly topped a critical milestone by hitting a $100 billion market cap.

This is massive for a lot of reasons, but chief among them is the simple fact that PANW is the first from their cohort to hit this milestone. More importantly, Palo Alto Networks has achieved this growth despite some internal and industry-level headwinds hitting the stock. 

For us, there's a lot to like for the next year at PANW, but we're still going to maintain a more cautious PT (price target) due to a competitive landscape that's doing nothing but heat up. 

In short: Palo Alto Networks has the fundamentals that can easily carry them to a $200 billion valuation in the next several years, but it also has the competition and an industry volatile enough to hold them back for a while. 

This is going to be a big 'prove it' year for PANW's future. Our bull thesis here relies on PANW's current scale being the deciding factor in them staying ahead of a competitive market, with our ultra-bull case featuring some AI multipliers. 

But even if Palo Alto Networks has to cede some ground to some really great competition, their base case here is compelling enough for us to stay overweight during a bumpy year. So, with the model proven and their viral growth days behind them, let's explore the multivariate paths PANW can forge.👇

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