This is how Palo Alto Networks stacks up towards its fundamental rivals

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Shares of Palo Alto Networks soared as a lot as 12% on Aug. 23 after the community safety firm reported outcomes for its fiscal fourth quarter and mentioned it anticipated gross sales to extend by at the least 25% in fiscal 2023.

Palo Alto
PANW
CEO Nikesh Arora described the corporate’s fiscal steerage as “prudent.” MarketWatch’s Wallace Witkowski summarized the company’s results and its recent history of beating analysts estimates and its own guidance.

Different elements which will have helped carry Palo Alto’s shares included an growth of its buyback program and a three-for-one stock split planned for Sept. 14.

Throughout fiscal 2022, Palo Alto’s gross sales elevated by 29% to $5.502 billion. The corporate’s gross revenue elevated by 27% to $3.783 billion. However that was outweighed by working bills totaling $3.972 billion, for an working lack of $189 million. The diluted web loss per share for fiscal 2022 was $2.71, narrowing from a lack of $5.18 a share in fiscal 2021.

For the fourth quarter of fiscal 2022, the corporate was worthwhile, with EPS of three cents. It additionally anticipated to be worthwhile on a GAAP foundation in fiscal 2023.

However from the instant response, it’s clear that buyers are fixated on Palo Alto’s gross sales development.

What about its rivals? In its annual report for fiscal 2021, Palo Alto listed 5 “fundamental rivals” by title: Cisco Methods Inc.
CSCO,
Examine Level Software program Applied sciences, Ltd.
CHKP,
Fortinet Inc.,
FTNT,
Zscaler Inc.
ZS
and CrowdStrike Holdings Inc.
CRWD.

FactSet lists three extra “key” rivals to Palo Alto inside the “community and communications {hardware}” area for which consensus gross sales estimates can be found by way of 2024. They’re included within the chart under.

How rapidly are Palo Alto’s rivals anticipated to develop?

Palo Alto isn’t alone in having a fiscal yr that doesn’t match the calendar. So as to examine its anticipated gross sales development with its rivals, we checked out consensus estimates for calendar years 2022, 2023 and 2024 amongst analysts polled by FactSet.

Listed here are the 9 firms listed by anticipated two-year compound annual development charges (CAGR) for gross sales by way of 2024:

Firm

Ticker

Two-year anticipated gross sales CAGR by way of 2024

Estimated gross sales – 2022 ($mil)

Estimated gross sales – 2023 ($mil)

Estimated gross sales – 2024 ($mil)

Market cap. ($mil)

CrowdStrike Holdings Inc. Class A

CRWD 33.9%

$2,142

$2,935

$3,837

$39,670

Zscaler Inc.

ZS 31.2%

$1,243

$1,660

$2,140

$23,124

Palo Alto Networks Inc.

PANW 21.8%

$6,070

$7,462

$8,998

$50,620

Fortinet Inc.

FTNT 20.8%

$4,383

$5,299

$6,392

$39,678

Arista Networks Inc.

ANET 12.3%

$4,064

$4,634

$5,124

$38,686

Motorola Options Inc.

MSI 6.5%

$8,867

$9,416

$10,059

$41,498

Juniper Networks Inc.

JNPR 4.5%

$5,213

$5,501

$5,690

$9,346

Examine Level Software program Applied sciences Ltd.

CHKP 4.2%

$2,317

$2,427

$2,515

$15,264

Cisco Methods Inc.

CSCO 4.1%

$52,620

$54,930

$57,024

$197,565

Supply: FactSet

Click on on the tickers for extra about every firm. Then read Tomi Kilgore’s detailed information to the wealth of data accessible totally free on MarketWatch quote pages.

For anticipated gross sales development over the subsequent two calendar years, Palo Alto ranks third, with smaller rivals Crowdstrike and Zscaler taking the highest two spots. The biggest firm on the record, Cisco Methods, brings up the rear. Then once more, Cisco’s “Finish to Finish Safety” phase is predicted to extend gross sales to $4.625 billion in 2024 from $3.86 billion in 2022, for anticipated CAGR of 9.5%.

Leaving the businesses in the identical order, right here’s a abstract of opinion amongst analysts polled by FactSet:

Firm

Ticker

Share “purchase” rankings

Share impartial rankings

Share “promote” rankings

Closing worth – Aug. 22

Consensus worth goal

Implied 12-month upside potential

CrowdStrike Holdings Inc. Class A

CRWD 100%

0%

0%

$185.88

$236.50

27%

Zscaler Inc.

ZS 84%

16%

0%

$163.00

$204.83

26%

Palo Alto Networks Inc.

PANW 92%

8%

0%

$508.05

$655.41

29%

Fortinet Inc.

FTNT 69%

31%

0%

$50.32

$71.74

43%

Arista Networks Inc.

ANET 57%

39%

4%

$127.14

$149.91

18%

Motorola Options Inc.

MSI 72%

21%

7%

$248.66

$286.44

15%

Juniper Networks Inc.

JNPR 40%

40%

20%

$28.97

$33.28

15%

Examine Level Software program Applied sciences Ltd.

CHKP 41%

37%

22%

$121.71

$137.77

13%

Cisco Methods Inc.

CSCO 45%

52%

3%

$47.71

$54.05

13%

Supply: FactSet

Don’t miss: What’s the best way to invest in tech stocks right now? This strategy is working well for one fund manager.

Hear from Ray Dalio at MarketWatch’s Best New Ideas in Money Festival on Sept. 21 and 22 in New York. The hedge-fund pioneer has sturdy views on the place the economic system is headed.

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