Palo Alto Networks
PANW
recently announced that it has inked a deal to acquire cloud security company, Bridgecrew, for $156 million. The deal is expected to close in Palo Alto’s third quarter of fiscal 2021 and is not expected to affect its bottom or top lines in the near term.
With this move, Palo Alto will fortify its Prisma Cloud platform with “shift left” security, which will enable it to help developers get security assessment and enforcement capabilities throughout the DevOps process.
Bridgecrew’s open-source infrastructure as code (IaC) scanner, Checkov, has been downloaded more than one million times in 2020 — its first full year after launch. Moreover, the company’s full security platform is gaining momentum among many cloud-first organizations.
This acquisition will not only strengthen the platform’s comprehensive cloud security capabilities but also make Palo Alto the first company to provide end-to-end security across the full application lifecycle.
Palo Alto Networks, Inc. Price and Consensus
Palo Alto Networks, Inc. price-consensus-chart
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Palo Alto Networks, Inc. Quote
Importance of Shift Left Security
In the traditional security approach in application development, securing the application is usually the last step before deployment. This often creates security loopholes, apart from taking more time to secure the application.
Meanwhile, the shift left security approach aims to address these issues with tighter integration of security at every step, right from conception and design to testing and deployment, leading to better security outcomes.
Palo Alto’s Efforts to Bolster Prisma Cloud
The Prisma Cloud platform brings all Palo Alto’s cloud security solutions under one umbrella to meet the need for end-to-end networking and security solutions. This enables enterprises to better focus on business growth without worrying about security loopholes in the system.
Palo Alto Networks has taken various key steps to address the need for integrated security, as more and more organizations are shifting to the cloud. The Prisma Cloud platform has been largely successful, boasting more than 1,800 customers, including 70% of the Fortune 100.
Acquisitions of PureSec and Twistlock and the recent introduction of Prisma Cloud 2.0, which includes four new cloud security modules, are only a few of the company’s various efforts to enhance the platform’s standing as the industry’s only comprehensive Cloud Native Security Platform.
Acquisition Strategy Bodes Well
Palo Alto’s strategy of making acquisitions to boost growth is long documented. The company acquired five companies in 2019 alone, including Demisto and Twistlock. Last year, it scooped up three companies, including Expanse, CloudGenix and Crypsis Group.
These buyouts have helped the company expand its product portfolio and customer base, thereby bringing in incremental revenues. Markedly, it has registered stellar double-digit revenue growth in the trailing five years.
Palo Alto has a cash-healthy balance sheet, which enables it to pursue acquisitions. Despite so many acquisitions, the company had cash and investments of nearly $3.21 billion as of Oct 31, 2020, which is marginally higher than its long-term debt of approximately $3.12 billion.
Zacks Rank & Stocks to Consider
Palo Alto currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include
Skyworks Solutions
SWKS
,
NXP Semiconductors
NXPI
and
Facebook
FB
, all sporting a Zacks Rank #1 (Strong Buy), at present. You can see
the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Skyworks Solutions, NXP Semiconductors and Facebook is currently pegged at 18.98%, 10% and 19.24%, respectively.
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