Stocks With Potential: Palo Alto Networks

Another growth stock in February that could make its investors happier and richer is cybersecurity expert Palo Alto Networks (NYSE: PANW). Like Pinterest, Palo Alto directly benefits from the COVID-19 pandemic. Before COVID-19, we had already witnessed a steady momentum towards working from home, but we can say that the pandemic accelerated this transition.

Third-party providers such as Palo Alto Networks are responsible for protecting cloud-based corporate and consumer data.

Just as every homeowner needs electricity and water, whether or not in any economic environment, the business needs protection from human and robot hacking threats. This means that the demand for cybersecurity solutions must remain constant regardless of the state of the economy. The excitement surrounding Palo Alto is related to the company's ongoing transformation towards a subscription-based operating model. Having pushed physical firewall products to the background, Palo Alto saw a tremendous increase in the percentage of sales from subscriptions. Considering the high margins and predictable cash flow that accompany cybersecurity subscriptions, this is very good news for the company. In addition, Palo Alto is a company that does not hesitate to harm its near-term business results in order to gain more cloud protection market share in the long term. For years, Palo Alto has been making acquisitions that have expanded its product portfolio, making its business more attractive to small and medium-sized businesses. This combination of organic growth and acquisitions should enable the company to increase its sales by 15 percent to 20 percent each year. In an industry classified by price-selling multiples of 20, 30, or even higher, investors can opt for leading cybersecurity brand Palo Alto for nearly 8 times Wall Street's projected full-year sales in fiscal 2021.   Stocks With Potential: Palo Alto Networks Source: https://www.fool.com/ You may also be interested in:

Stocks With Potential: Cresco Labs