PANW
Still rich, still loved
Palo Alto Networks is getting the kind of review that makes valuation purists roll their eyes: yes, the stock is pricey, but the business is moving fast enough to justify the bill. The company’s NGS ARR climbed 33% year over year to $6.33 billion, and non-GAAP operating margin hit 30.3%. That’s the sort of combo that makes growth investors start nodding like they just found the last good seat on a sold-out flight.
The real sales pitch: recurring revenue
The bull case here isn’t just “security is hot.” It’s that Palo Alto keeps turning more of its business into sticky, recurring revenue, while still throwing off strong free cash flow. In other words, this isn’t a one-hit wonder; it’s a subscription machine with a decent habit of getting more efficient over time.
Big goals, bigger expectations
Management is aiming for:
- $20 billion in NGS ARR by 2030
- a 40% free cash flow margin by FY28
That’s an aggressive roadmap, but it helps explain why the market keeps giving PANW a premium multiple. If the company keeps executing on integration and margin expansion, the valuation starts looking less like a tax and more like a forward bet.
Why you should care
For investors, the question isn’t whether PANW is cheap — it clearly isn’t. It’s whether the company can keep compounding recurring revenue fast enough that today’s rich price looks reasonable in hindsight. If the integration story keeps working and margins keep creeping up, this stock may still have room to run. Big picture: the market is paying up because Palo Alto is acting less like a cybersecurity vendor and more like a software platform with a serious cash flow engine.