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PANW - Palo Alto Networks Inc

02 September 2022

Palo Alto Networks is a cybersecurity vendor that sells security appliances, subscriptions, and support into enterprises, government entities, and service providers. PANW is a wallstreet darling and it is not a cheap stock, however it trades in line with other quality stocks. It is expected to grow revenues at 22% per year for the next 5 years, and margins to expand towards 75%. With those calculations in mind we expect a price of $725 for the next 3 years for PANW. It trades at high multiples so growth is key for the stock to keep up. 

Technicals - PANW drops often by 30% or more which also reveals investors' anxiety and uncertainty about the future. That said it looks strong and timely on the chart. It is sitting at a buy point just above 200ma and support of 530. Traders can start a position here with a stop loss of 4%-5% for the potential move up to $600 where they can sell some and then hopefully to the prior highs of $630. This trade gives a 1:3 risk/reward ratio.

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Intersect Analytical combines valuation based with technicals to better time investment decisions. All opinions are not investment advice.