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Palo Alto soars on mistrial ruling; Citi considers settlement possible

  • Palo Alto Networks (PANW +10.9%) is within striking distance of its post-IPO high of $79.99 after a mistrial was declared for rival Juniper's (JNPR -0.6%) infringement suit against the company. The judge presiding over the suit has instructed lawyers from both parties to meet to determine their next moves.
  • FBR calls the decision a big "sigh of relief" for Palo Alto investors. Ahead of the mistrial announcement, Citi was already arguing the odds of a settlement had grown, given a judge's ruling that no second trial covering indirect infringement would occur.
  • Citi even thinks a cross-selling deal between Palo and Juniper is possible, given Juniper's recent struggles in the branch office firewall market.
  • Palo Alto's official statement
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Comments (16)
  • anonymous50
    , contributor
    Comments (14) | Send Message
     
    I have really enjoyed Danier Ravicher's detailed and informative coverage of the day 1-5 proceedings. While I can't begin to try and guess what was at work in the jury room, to this observer, it means its not a slam dunk, clear cut case for Juniper. I'm long on PANW and cautiously optimistic.
    7 Mar, 04:50 PM Reply Like
  • Cygnusx3
    , contributor
    Comments (160) | Send Message
     
    I thought the risk was too great and I bailed on PANW. Oh, well.
    7 Mar, 05:25 PM Reply Like
  • Ta0
    , contributor
    Comments (390) | Send Message
     
    I still have all my shares. Very much looking forward to PANW hitting tripple digits.
    8 Mar, 12:15 AM Reply Like
  • wil3714
    , contributor
    Comments (1909) | Send Message
     
    When? You dont think its heavily priced? It'll take a lot to get there.
    8 Mar, 05:40 PM Reply Like
  • Ta0
    , contributor
    Comments (390) | Send Message
     
    None of us can time the market, so I'm not going to even try, wil3714, but given that PANW's firewall technology is singularly unique and quite advanced, I am confident that they will dominate the market, as threats from global sources become more and more intense and devastating.

     

    No other firewall company has been able to come remotely close to the technology that PANW is currently offering their customers. If you feel that cyber threats will decrease over the next few years, there is a possibility that PANW's prices may go down. However, I don't think that's likely.

     

    If anything, serious cyber threats will increase in proportion to the increase in technology usage, as we barrel precariously towards self-driving cars, wallet phones, and wireless wearables and implants. Somebody's gotta protect all of that cyber-infrastructure, and at this point in time, PANW's the only game in town advanced enough to deal with all the crap that's flying around out there in cyberspace.
    9 Mar, 09:13 PM Reply Like
  • wil3714
    , contributor
    Comments (1909) | Send Message
     
    Many competitors in the space, such as CHKP, FTNT, FEYE, CSCO, JNPR etc and that not including private companies like Blue Nile.

     

    PANW is projected to do under $600M this year which isnt close to blanketing the enterprise market.
    10 Mar, 12:38 AM Reply Like
  • User 13565622
    , contributor
    Comments (2) | Send Message
     
    I'm sorry but if you think no other technology comes close to PAN then you are misinformed. And judging from your reply I wouldn't be surprised if you work for them or are in some way affiliated. This is not to be critical either - merely an observation.

     

    The fact is that there are more than a few offerings which offer what PAN offers. What they do not offer, however, is a superior marketing machine. Sheesh, that alone probably makes them a reasonable investment.
    10 Mar, 08:50 PM Reply Like
  • wil3714
    , contributor
    Comments (1909) | Send Message
     
    No doubt the do have premium technology but you talk like there the only game in town. The valuation is ridiculous from 6 months ago that I dont see $100+ anytime based on the company alone. The price just doubled and on what? It maybe acquired based on the RSA conference recently and its lower market cap versus larger competitors.

     

    At least FEYE has APT technology architecture which is big for firewalls. And adding the Mandiant acquisition was genius propelling them into the number 1 spot in data prevention. They just increased there reach into $30B market which is premium space in the likes of EMC, Cisco, Juniper, Accenture, HP, and Oracle of data capture and analysis.
    11 Mar, 09:49 AM Reply Like
  • Ta0
    , contributor
    Comments (390) | Send Message
     
    User 13565622

     

    If you are aware of any other offerings which offer a similarly advanced technology as what PANW offers, please share them with me, because I would certainly put my money in and support them as well.

     

    I am not singularly fanatic about any one stock. I am only here to learn more about the best ones and to make money. I have no ego when it comes to making money. I'm not too proud to invest in a company that is making me money, and I am certainly not ashamed to sell a stock that's doing poorly.

     

    And BTW: I don't work for PANW, nor am I affiliated with them. Believe me, I'm not smart enough for PAN to even remotely consider hiring me for doing anything but the most menial of labors. But that does not mean I don't know how to pars through their technology and understand how it works at a basic and general level, and because I know how their technology works, I also know that in comparison, other companies are at least three to five years behind them, and by the time the other companies have caught up, they will be even farther ahead.

     

    Until my constant research uncovers new, even more advanced technology, my money is still with PANW in the firewall industry.
    11 Mar, 12:08 PM Reply Like
  • Ta0
    , contributor
    Comments (390) | Send Message
     
    wil3714

     

    FEYE is a great company. I have almost as much skin in FEYE as I do in PANW, but FEYE is most certainly NOT a firewall company. What they do is called malware detection.

     

    If you can imagine the firewall as a fortress which defends the servers within from all potentially harmful virii, worms, bugs, and other such nasty creatures, then FEYE is a detection device, roaming around outside of the firewall, looking at all the traffic floating by and then notifying the firewall if something suspicious is coming to the gate. The firewall then stops the identified nasties from gaining access.

     

    Here is the crux of the matter. You can't use FEYE alone without a firewall or a switch because it can only identify and notify that something bad is trying to get in. It can't keep it out. It's not a firewall.

     

    Also, you can't use a legacy firewall (old technology) that is not fine-gradient enough because it needs to be able to tell the difference between all the various stuff that's going in and out. A firewall worth its salt can't just shut off all traffic because some might be potentially bad. What if I am inside the firewall and wanting to share some photos of my pet dog on Facebook and the firewall isn't smart enough to be able to see that my Facebook posting is innocuous, as opposed to some horrific worm trying to find a chink in the armor? That's where PANW is very different. It is able to identify the difference between all the various traffic going through, and it gives the IT security people very smart tools to do their work.

     

    And by the way, PANW also offers APT technology (Advanced Persistent Threat) as part of their firewall package.
    11 Mar, 12:31 PM Reply Like
  • Ta0
    , contributor
    Comments (390) | Send Message
     
    Please read my comment again. I stated that 'no other firewall company has been able to come remotely close to the technology that PANW offers'. I did not say there were no other firewall companies. Once this litigation issue is behind them, they will take off like a rocket.

     

    No need to 'blanket' the industry just to get to $100. That will happen just from the quality of their products, and from growing cyber attacks which continue to rock the world, day after day. But far be it for me to tell anyone to do anything with their money. You dont need to buy PANW. After all, there are many other firewall companies out there including private ones like Blue Nile. :-)
    10 Mar, 11:17 AM Reply Like
  • wil3714
    , contributor
    Comments (1909) | Send Message
     
    NO doubt they have disruptive technology but the growth rate is slowing down and the market wont give them that premium valuation.
    10 Mar, 03:32 PM Reply Like
  • Ta0
    , contributor
    Comments (390) | Send Message
     
    Wil3714

     

    You don't think the market will give them premium valuation? I'm betting that they will, and I'm betting with real long money.

     

    If you feel that I am wrong, then short them and you'll make money too (if they are as bad as you feel they are). Bull or Bear, there's always a way to make money off the stock. Best of luck to you.
    11 Mar, 12:49 PM Reply Like
  • wil3714
    , contributor
    Comments (1909) | Send Message
     
    Thx, I just feel its a little frothy at these levels, too far too fast.
    11 Mar, 03:16 PM Reply Like
  • Don Warnecke
    , contributor
    Comment (1) | Send Message
     
    I tend to agree with Ta0 (and no, I am not affiliated with Palo Alto). A decade ago one of my primary functions was managing firewalls (primarily Check Point, Cisco PIX/ASA, and Guantlet). I believe the Palo Alto product is fundamentally different. Other firewall vendors are trying to catch up and bolting on some of the functionality. I believe an IDS or APT vendor (think Sourefire/Cisco IDS and FireEye) will catch up sooner as they add firewall functionality to there non-firewall devices.
    Nir Zuk was an early employee at CheckPoint when he got out of the military. Eventually he left when he felt they wouldn't let him make the changes to the product that he felt he needed (after all, I didn't want drastic changes to the product I knew was top tier at the time). So he left for Netscreen where he thought he would have a freer hand. It wasn't as free as he'd like and Juniper acquired him. So, he left Juniper to build from the ground up the product that he wanted to build. I don't mean to suggest that he was alone. A lot of talented engineers and developers joined in the quest. Forbes has a good article on it, but not important to the stock itself. I think the product is fundamentally different. It is speculative like many young companies and not for everyone (I generally prefer dividend-paying stocks). But you don't have to be affiliated with Palo Alto to believe it is different. And they certainly have those who dislike them, if for no other reason than the company has an air of arrogance. But some dramatic changes will be necessary for one of the large firewall vendors to stop them.
    But your point is logical from a valuation standpoint. I would be surprised if the pullback happened after the lawsuit clears up, but time will tell. Lets all be clear though, the lawsuit isn't cleared up yet.
    10 Mar, 11:47 PM Reply Like
  • Ta0
    , contributor
    Comments (390) | Send Message
     
    Don Warnecke

     

    That's very interesting information about Nir Zuk. He sounds like a really interesting individual. I didn't know that because I only research the technology, not the people behind them. Thanks for sharing.

     

    I have no ego when it comes to making money. If I feel that an 'arrogant' company is going to make me money, I'll bet on them. :-)

     

    As for the lawsuit, I am not too worried about it. Let the chips fall where they may. As long as they don't fall below my purchase price and I am in the green, I'm happy. Having said that, if they reach a certain price point, I will cash out a small chunk and go shopping...enjoy the fruits of my---er---their labor.
    11 Mar, 12:42 PM Reply Like
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