PANW – Market expectations are for Uniform ROA to reach new peaks, but management may have concerns about SASE, competition, and their growth strategy

• Palo Alto Networks, Inc. (PANW:USA) currently trades at a recent high relative to UAFRS-based (Uniform) earnings, with a 52.6x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about their SASE product, new security market entrants, and the One Palo Alto Network strategy.
  

• Specifically, management may lack confidence in their ability to maintain the growth of their SASE product category and customers spend on the SASA network, and they may be downplaying concerns about the threat posed by cloud security startups. Furthermore, management may lack confidence in their ability to carefully execute their acquisition strategy and continue to meet their non-GAAP EPS, revenue, and billings growth targets. Moreover, they may have concerns about the potential of their One Palo Alto Networks strategy and the sustainability of share buybacks, and they may be exaggerating the progress of customer transitions to cloud. Finally, they may lack confidence in their ability to sustain swim lane development and new customer growth for Prisma Cloud.