Palo Alto Networks

Methodology

Palo Alto Networks' cybersecurity platform generates predictable subscription revenue with exceptional visibility from multi-year enterprise contracts and expanding use cases. The shift to platformization and cloud security creates durable growth. The calculation works well for this security leader with strong recurring revenue characteristics and high customer retention.

Methodology

Palo Alto consistently commands premium PEG ratios reflecting cybersecurity demand growth, platform consolidation trends, and market leadership in enterprise security. While expensive on absolute terms, secular tailwinds and competitive positioning justify valuations. Compare to Palo Alto's historical range and security peers like CrowdStrike while considering platformization success.

Methodology

Palo Alto pays no dividend, making PEGY equal to PEG as management prioritizes R&D investments and strategic acquisitions to expand platform capabilities. Capital allocation focuses entirely on technology leadership in cybersecurity. For this high-growth security leader, reinvestment in product development matters far more than current shareholder income.