An Altogether Strong Showing as Palo Alto Kicks Off Fiscal 2023 With Strength Across Its Platforms

We are maintaining our $200 fair value estimate for wide-moat Palo Alto Networks after the firm kicked off fiscal 2023 with strong financial results. With shares up 6% after-hours as the company beat Factset consensus estimates, we still see some upside for investors looking for high-quality, cybersecurity exposure. Palo Alto's solutions are sticky and have numerous touchpoints across an enterprise's IT infrastructure. In our view, Palo Alto's leading platform approach for network security, cloud security, and security automation is spurring organizations to consolidate spending toward its products, which increases switching costs. We anticipate the company will reap the positive effects of having customers locked into its ecosystem as it aims to achieve GAAP profitability consistently.