At US$402, Is Palo Alto Networks, Inc. (NASDAQ:PANW) Worth Looking At Closely?

Today we're going to take a look at the well-established Palo Alto Networks, Inc. (NASDAQ:PANW). The company's stock saw a significant share price rise of 37% in the past couple of months on the NASDAQGS. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Palo Alto Networks’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Palo Alto Networks

What Is Palo Alto Networks Worth?

Good news, investors! Palo Alto Networks is still a bargain right now. According to our valuation, the intrinsic value for the stock is $508.72, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Palo Alto Networks’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Palo Alto Networks look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Palo Alto Networks, at least in the near future.

What This Means For You

Are you a shareholder? Although PANW is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to PANW, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on PANW for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For instance, we've identified 3 warning signs for Palo Alto Networks (1 is potentially serious) you should be familiar with.

If you are no longer interested in Palo Alto Networks, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.