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PANW – Market expectations are for declining Uniform ROA, but management is confident about demand, growth, and their competitive moat

October 29, 2019

  • Palo Alto Networks, Inc. (PANW:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 35.4x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, but management is confident about demand, growth, and their competitive moat
  • Specifically, management is confident they are the growing faster than anybody else in the cybersecurity space and that they don’t see serious competition from other firewall vendors. Moreover, they are confident the lack of software-based competition allows them to be differentiated and reduce their speed of deployment, and they are confident all their customers have a growing IoT security need. Furthermore, they are confident they will see a revenue recognition mix shift in the coming years between traditional firewall and their software form factor.

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