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Palo Alto Networks: Another Costly Deal

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  • Palo Alto Networks is aggressively acquiring CyberArk and Chronosphere for a combined $28.4B to fill platform gaps, signaling strategic weaknesses.
  • The cybersecurity company is still struggling to boost growth after the cybersecurity platformization shift with a FY26 forecast of only 14%.
  • Recent deals will boost reported growth rates above 30%, but underlying organic growth remains lackluster and integration risks are elevated.
  • The stock's valuation remains stretched at nearly 50x FY26 EPS and over 12x revenue, despite slowing organic growth and heavy shareholder dilution.

Only months ago, Palo Alto Networks Inc. (PANW) bought CyberArk Software Ltd. (CYBR) in a deal where investors were warned to fade the rally. The cybersecurity company has long promoted the platformization concept, but the company announced another deal to acquire Chronosphere highlighting the issues with the business model. My investment thesis remains Bearish on the stock due to the stretched valuation.


Read the full article on Seeking alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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