Palo Alto expects Q2 earnings (excluding items) of 4 cents per share on revenue in the range of $94 million. Not only would this represent a 66% jump, but it also exceeds estimates of $90.8 million. Essentially, the company is doing what it has to do to grow and showing the confidence that it has in its business.
Impressively, after (only) two full quarters as a public issue, Palo Alto is still proving that it can deliver the goods. Investors continue to struggle with the investment case. Considering that the company has no debt while sitting on $324 million in cash, it's hard to imagine a better risk/reward situation.
As evident by its growth trend and having what is considered next generation security along with one of the most innovative platforms in the industry, the company has a technology that businesses can't be without. This is why I don't expect Palo Alto to remain an independent much longer -- especially not if the stock keeps falling.
Palo Alto would make an excellent addition to a company such as IBM (IBM) or Cisco (CSCO) -- particularly to leverage their existing enterprise offerings. What's more, with Cisco's recent acquisitions as it tries to shore up its cloud strategy, this is one buy that Cisco is certain to make at some point in 2013.I like Palo Alto's business and I think the stock is oversold -- suffering from investors' expectations that were too high. That said, for patient investors with an appetite for risk, this is a great buy at $49 as the stock has a chance to reach $60 during in the next six to 12 months. At the time of publication, the author held no position in any of the stocks mentioned. Follow @rsaintvilus This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV