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Palo Alto: Leading Cybersecurity Stock To Buy (NASDAQ:PANW) | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #ransomware


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Palo Alto Networks, Inc. (NASDAQ:PANW) is a prominent American cybersecurity enterprise consisting of three distinct reportable segments: Product, Subscription, and Support. This analysis delves into the company’s ascension to market leadership in the cybersecurity industry in recent years, aiming to identify the key factors

Revenue by Segment ($ mln) (FY Ending July)

2018

2019

2020

2021

2022

2023F

6-year Historical Average

Product

880

1,096

1,064

1,120

1,363

1,532

Growth Rate % (YoY)

24.2%

24.6%

-2.9%

5.3%

21.7%

12.4%

13.1%

Subscription

758

1,033

1,405

1,899

2,539

3,393

Growth Rate % (YoY)

38.1%

36.2%

36.1%

35.1%

33.7%

33.6%

38.8%

Support

636

771

939

1,237

1,599

2,018

Growth

Cybersecurity Revenue by Company (‘CY’)

2017

2018

2019

2020

2021

2022

Average

Palo Alto Networks

1,989

2,593

3,121

3,783

4,858

6,156

Growth Rate % (YoY)

30.4%

20.3%

21.2%

28.4%

26.7%

25.4%

Fortinet (FTNT)

1,495

1,805

2,163

2,594

3,342

4,417

Growth Rate % (YoY)

20.7%

19.9%

19.9%

28.8%

32.2%

24.3%

Cisco (CSCO)

2,228

2,554

3,032

3,277

3,476

3,835

Growth Rate % (YoY)

14.6%

18.7%

8.1%

6.1%

10.3%

11.6%

Symantec (now known as Gen Digital)

4,752

4,768

2,493

2,752

3,107

Growth Rate % (YoY)

0.3%

-47.7%

10.4%

12.9%

-6.0%

Checkpoint (CKPT)

1,855

1,917

1,995

2,065

2,167

2,330

Growth Rate % (YoY)

3.3%

4.1%

3.5%

4.9%

7.5%

4.7%

CrowdStrike (CRWD)

119

250

481

874

1,452

2,241

Growth Rate % (YoY)

110.3%

92.7%

81.6%

66.0%

54.4%

81.0%

Microsoft (MSFT)

437

625

842

1,115

1,530

2,199

Growth Rate % (YoY)

42.9%

34.8%

32.4%

37.2%

43.8%

38.2%

IBM (IBM)

2,222

2,358

1,795

1,806

1,972

2,180

Growth Rate % (YoY)

6.1%

-23.9%

0.6%

9.2%

10.5%

0.5%

Okta (OKTA)

257

399

586

835

1,300

1,858

Growth Rate % (YoY)

55.7%

46.8%

42.5%

55.7%

42.9%

48.7%

Trend Micro (OTCPK:TMICF)

1,321

1,464

1,520

1,686

1,654

1,705

Growth Rate % (YoY)

10.8%

3.9%

10.9%

-1.9%

3.1%

5.4%

Zscaler (ZS)

154

243

360

536

860

1,348

Growth Rate % (YoY)

57.5%

48.2%

48.8%

60.4%

56.8%

54.3%

Others

21,486

17,667

22,845

30,621

36,035

39,721

Growth Rate % (YoY)

-17.8%

29.3%

34.0%

17.7%

10.2%

14.7%

Total

33,561

36,629

43,511

51,687

61,399

71,100

Growth Rate % (YoY)

9.1%

18.8%

18.8%

18.8%

15.8%

16.3%

Cybersecurity Market Segments

Segment Size ($ bln) (2022)

Segment Size (2027F)

CAGR

Identity & Access Management

14.7

27.9

13.7%

Vulnerability & Security Analytics

13.9

29.5

16.2%

Data Security

4.2

12.3

23.9%

Web & Email Security

3.9

7.2

12.8%

Network Security

22.9

42.3

13.0%

Endpoint Security

9.4

23.4

20.0%

Integrated Risk Management

10.9

21.2

14.3%

Total

80.0

163.8

15.4%

Rank

Score

Method

1

100

Top right quadrant, beyond black square

2

70

Top right quadrant, within black square

3

50

Top left and bottom right quadrants

4

30

Bottom left quadrant, within black square

5

20

Bottom left quadrant, beyond black square

0

10

Not within any quadrants

Company

Network Firewall

SSE

SD-WAN

Score

Palo Alto

2

2

2

210

Cisco

3

3

1

200

Fortinet

2

0

1

170

Juniper (JNPR)

3

0

3

100

Forcepoint

5

3

5

90

Barracuda

3

0

4

80

Checkpoint

2

0

0

70

Palo Alto Valuation

FY2024F

Revenue ($ mln)

8,842

P/S

8.50x

Equity Value ($ mln)

75,159

Shares Outstanding (‘mln’)

305.9

Price Target ($)

245.74

Current Price ($)

213.39

Upside

15.16%

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