Wells Fargo Starts Palo Alto Networks (PANW) at Market Perform, Cites Competition and High Valuation

Wells Fargo initiates coverage on Palo Alto Networks (NYSE: PANW) with a Market Perform and $52-55 valuation range.

The firm comments, "PANW has clearly done a remarkable job gaining market share over the last few years in the network security market. The company's best in class application control technology has helped redefine the market in our view. As a result, PANW has grown to $300MM in annual revenue, faster than any company in the network security space since the late 1990's and should exhibit revenue growth in excess of 40%/yr for the next three years. However, competition for application control has increased meaningfully and we think it will be more difficult for PANW to continuously gain share at such a rapid pace. This combined with a high valuation (about 8.5x 2013E revenue) makes us cautious on the stock."

For an analyst ratings summary and ratings history on Palo Alto Networks click here. For more ratings news on Palo Alto Networks click here.

Shares of Palo Alto Networks closed at $52.39 yesterday.

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