Palo Alto Networks Inc (PANW) continues to run the table in the cybersecurity space.
PANW stock is growing at a stunning pace, given that it’s been growing this fast for two years now and shows no sign of slowing down.
Q2 earnings were released recently and the numbers tell the story on their own. Revenue was up 54% from the same quarter a year ago. Adjusted net income was up a whopping 115%, and adjusted earnings were up 110%.
But that’s just the beginning. Product sales (its cybersecurity products) were up 47% year-over-year, and services (supporting its products integration, implementation and maintenance) were up 61% year-over-year.
What this shows is PANW is building a substantial base of business. Getting firms to switch cybersecurity products and services is not very easy, especially in larger enterprise operations. The fact that PANW is bringing in new customers at this rate is very encouraging.
It’s also interesting to note that services were up more than products. That indicates that customers that have PANW products are now reaching out for services in growing numbers.
PANW Is a Steal at Current Prices
This is one of the unique opportunities to move into Palo Alto before it starts to climb back to its heady levels.
In January and early February PANW stock was hammered along with most other stocks, particularly tech stocks, not for anything in particular but as a precautionary measure given the tumult in China and the fact that growth in the U.S. and globally was going to be less than dynamic for 2016.
If companies aren’t growing, then they’re not spending on things like cybersecurity upgrades or new vendors to maintain the system.
However, the trend is that businesses see it much more efficient to put systems in place than people. They will buy a cybersecurity system that will save them huge potential costs if they’re hacked. They can also outsource their services costs and tailor them up or down given their need, instead of hiring more IT staff on their own payroll.
This is the nature of business today, and PANW is well aware of it. This is one of a handful of companies out there that has an excellent grasp on where the marketplace is today and how its products and services can be put to their best value.
And as usual for the analysts, what they saw was terrible news for tech has now turned into a manic run back to reality. The Nasdaq has rallied more than the Dow Jones Industrial Average or the S&P 500 in recent days, and PANW is no exception.
Analysts are now raising their expectations for the stock, with Barclay’s upgrading its 2016 price target to $184, just 2 weeks ago.
The point is, now is a good time to get in on not just a powerful momentum stock, but a solid long-term grower with a plan.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool,PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
