This week the Valens Securities team highlights our most interesting equity insight from across our tools and our analysis.
Market expectations for competitive pressures to compress ROA’ and growth appear too pessimistic considering secular trends though headwinds may limit near-term upside
PANW is trading in the middle of historical valuations with a 37.9x V/E’. While this initially appears to be a premium valuation, well above average valuations in the market, current market expectations are actually very low relative to the company’s historical performance. The market is expecting PANW, who has seen steadily improving ROA’ the last several years, to see ROA’ be cut in half, with Asset’ growth below historic rates.