This cybersecurity company is forecast to grow at a 51.4% pace this quarter and 57.5% over the next quarter.
Palo Alto Networks Inc. (PANW)
From: Internet Wealth Builder
To say Palo Alto Networks Inc. (PANW) is volatile is to put it mildly. The shares have had a nice run, but are still way off the high reached late last year when the shares topped out at $194.73.
Recent headlines have spurred new interest in cyber security stocks. They include the huge Yahoo data security breach that has affected 500 million users along with all the noise around the hacking of the Democratic National Committee emails. Add to that the never-ending discussions around Hilary Clinton’s email server and you can understand the recent investor interest.
Palo Alto is one of the best bets in the cyber security group and looks poised for a rebound. Wunderlich Securities recently upgraded the stock and set a $190 price target.
The company recently reported results for the 2016 fiscal year (to July 31). It showed total revenue of almost $1.4 billion, up from $928.1 million in fiscal 2015. Fiscal year billings grew 56% year-over-year to $1.9 billion. However, the company is still well short of profitability, posting a loss of $225.9 million ($2.59 per share) for the year. Free cash flow was $585.6 million, compared to $316.5 million in 2015.
Palo Alto is rapidly moving to a cloud based system, which should lower costs and increase revenue.
The stock isn’t cheap and is still losing money, but the growth potential appears to be there. Buy with a target of $190.
Glenn Rogers in Gordon Pape’s Internet Wealth Builder, www.buildingwealth.ca, 1-888-287-8229, October 3, 2016