Is Palo Alto Networks Stock a Buy?
Palo Alto Networks (NYSE: PANW) finished 2020 on a high note. After languishing for most of the year with lower than hoped for growth and with investors digesting multiple acquisitions from the last few years, shares surged during the fourth quarter and ended the year up 54%. The reason? A rosy outlook that indicates the cybersecurity leader's spending to keep pace with a fast-changing industry is starting to pay off. It's not my favorite stock in the security software space, but Palo Alto Networks is nevertheless worth keeping tabs on.
The cybersecurity industry is constantly changing, but the pandemic accelerated trends that were already giving many organizations a headache. Cloud computing and the increasingly remote workforce it supports present new challenges like securing data centers, protecting data traveling via the web (versus within a closed network like an office building), and securing the at-home devices used by remote employees.
This has opened the door for a rapid disruption of the status quo. The recent SolarWinds security breach underscores the important task of staying ahead of the bad guys. Palo Alto Networks, itself a legacy security firm, has been dealing with a slew of upstart competitors addressing today's pressing digital security needs. Its response has been to go shopping -- the company has acquired 11 smaller software vendors since the beginning of 2018, tallying up to a few billion dollars in spending. Its latest was $800 million for data and attack monitoring firm Expanse.
Source Fool.com
