Palo Alto Networks Should Keep Growing -- But its Stock Price Might Not
Palo Alto Networks (NYSE: PANW) just closed another fiscal year of high adjusted free cash flow margin and strong double-digit revenue growth. Management anticipates similar encouraging results next year -- but that means the upside potential of the cybersecurity specialist's stock price should remain limited.
Palo Alto's results for the fiscal fourth quarter, which ended on July 31, confirmed that the company's transition from its legacy hardware offerings to a cloud-based cybersecurity portfolio is materializing. Total revenue grew 18% year over year to $950.4 million, despite product revenue, which includes hardware solutions, staying flat at $305.6 million.
Granted, the coronavirus pandemic had a negative impact on the company's legacy business, as testing and implementing physical appliances requires real-world interactions. But Palo Alto had been preparing for the inevitable shift to cloud computing for several years.
Source Fool.com
