Palo Alto Networks Earnings: High-Flying Palo Alto Closes out the Year in Style

We are raising our fair value estimate to $245 from $225 for wide-moat Palo Alto Networks after the firm closed out fiscal 2023 with a robust set of results coupled with medium-term sales guidance ahead of our prior estimates. Whereas competitors like Fortinet have seen macro pressures affect forward-looking metrics such as billings, Palo Alto’s forward-looking metrics remained strong for the quarter. We believe this strength is a result of the firm’s efficient go-to-market motion and its wide range of products that have helped insulate the firm from macro-induced contractions in demand. Following a sharp increase after hours, we view Palo Alto shares trading in the 3-star range following our fair value increase.