The current status of competitors
Palo Alto Networks Inc (NYSE:PANW) is also a key player in the network and communication industry. The company recently launched the first platform to offer private cloud deployment option for APT detection, analysis, and prevention in a timely manner. It is intended to cater to the demands of customers with restrictions on accessing a public cloud option. When employed with Palo Alto Networks’ next-generation firewall, this WF-500 appliance provides full prevention. Palo Alto Networks Inc (NYSE:PANW) is currently the only company that is providing this “closed loop” prevention solution that comprises of private or public cloud deployment options.
In 2013, Palo Alto Networks Inc (NYSE:PANW) entered into a distribution agreement with Grupo Dice, a leading distributor of IT infrastructure equipment and services in Mexico. As per the terms of this arrangement, Grupo Dice will provide Palo Alto Networks’ Next Generation Firewall (NGFW) portfolio to its existing customers and value added resellers. Combining many years of experience and a strong network and infrastructure of Grupo Dice, and the innovative next generation platform of network security introduced by Palo Alto, will enable Mexican enterprises to secure their networks and safely run more complex and rapidly growing number of applications on their networks.
Conclusion
Cisco Systems, Inc. (NASDAQ:CSCO)’s recent acquisition of Sourcefire will immensely enhance its market presence in the security software and services market. Though currently, the margins of Sourcefire may seem low, they are expected to rise in the long run as the research and development being conducted starts to materialize. Cisco is also currently undervalued as its P/E (ttm) is 14.2 times, which is quite lower than the industry average of 29.9 times.
In the light of Palo Alto’s innovative launch of WF-500 and its geographic expansion in Mexico, the company is expected to continue to report higher revenue and margins. It is a technology driven high growth stock. The company has also previously reported a CAGR of 74% on revenue over a period of three years. Its net margin has also turned positive, after incurring net losses for a couple of years. The company is also investing heavily in research and development to continuously come up with innovative services for its customers. To sum up, I would advise this stock for investors who can lock their investment for a few years as the company does not declare annual dividends.
The article Is Cisco Strengthening Its Position in the Security Software Market? originally appeared on Fool.com and is written by Awais Iqbal.
Awais Iqbal has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and Sourcefire. Awais is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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