Palo Alto Networks Inc, the cyber security company is currently valued at 51 billion USD.
I estimate the intrinsic value of Palo Alto Networks is 120 billion USD.
Cyber security is a business of the future. Computers which run nuclear power plants, cars which carry the main decision makers, fighter planes, tanks, nuclear missiles silos, war ships are all run by computers.
If one country at war is able to hack successfully and hack the computer systems of the other country with which it is waging war it could block all its vital systems, at least temporarily.
For personal computers, tablets and smartphone users cyber security is of the utmost importance, because people's private lives and most prescient secrets are usually stored on their mobile devices.
What is more, with the future advent of Internet of Things, IoT cyber security will become even more important.
A problem with Palo Alto Networks Inc, is that it is loss making. Palo Alto Networks must find a way to profitability or investors will punish its valuation. Especially when interest rates levels are rising.
Capital is plentiful for cloud cyber security companies like Palo Alto Networks, which can thus finance the cash it is burning with all those net losses throughout the yers.
But sudden stop of capital flow has been known to occur. So Palo Alto Networks must find a path or road map to profitably producing cyber security software.
No comments:
Post a Comment