Palo Alto is a leader in the operational security segment. The company is global in terms of customer volume and revenue parameters.

Palo Alto operates in several market sectors at once:

• network security;

• specialized software for security services;

• cloud security.

All three directions are developing quite dynamically. Based on consistent movement in all key areas, Palo Alto’s business is built quite clearly. Important support is in the “zero trust” strategy. It means that by 2025, the majority of operating companies will need high thresholds to ensure basic security within corporate networks.

The Palo Alto strategy shows that the target market segment can grow by 14-15% per year. For the last 3 years, the company’s data reflect revenue growth of 20% year-on-year. This means that the business will be able to maintain the leading pace of expansion in the future, if force majeure does not happen.

Fulcrum points:

• the cybersecurity sector. The expenses of enterprises for this will grow proportionally;

• bet on network security;

• reduction of administrative costs;

• increase in adjusted operating margin.

Risks:

• the tendency of providers to abandon different products and switch to only one;

• global economic slowdown;

• extension of the terms of implementation of contracts.

In general, Palo Alto seems to be quite a promising paper with a wide potential for outstripping growth.

The consensus forecast for Palo Alto shares is $220 in the perspective of the year.