“The prospects of sustainable teens growth, modest, even if non-linear, profitability expansion, and durable 25-30% growth at more than $4.5 bln scale appear attainable, with PANW’s size, liquidity and thematic exposure creating scarcity value, thus defending premium valuation and our buy rating,” analyst said.
Revenue growth remains robust, with remaining performance obligations tracking above 20%, a key indicator of business momentum. Citi noted that normalized buying patterns in the firewall and appliance market are supporting revenue, with no significant impact from supply chain disruptions.
The company’s Next-Generation Security business is expected to grow at a durable 25-30% annually, reaching over $4.5 billion in scale. Advanced subscription momentum also suggests pricing strength in fiscal year 2024.
Citi emphasized Palo Alto’s market positioning, liquidity, and thematic relevance as factors justifying its premium valuation.
This article was originally published here.
