It seems as if the Street would much prefer if Palo Alto suddenly switched from a top-line performer to posting bottom-line gains. But I think it's too soon. This is still a young company that is experiencing incredible growth. But Palo Alto is not immune to macro conditions.
Although Cisco spoke optimistically about a second-half rebound, it's anyone's guess when that's actually going happen. The recent 40% decline in the shares of
(ARUN) serves as a perfect example of what can happen when high expectations does not manifest itself into results.
After a 54% jump in revenue, could it be possible that Palo Alto management is being overly cautious? Perhaps. But it's certainly justified. But investors have to realize that this doesn't change the fact that the company has products and services that enterprise customers are willing to pay handsomely for.
With assets that helps corporate clients secure their network while safely enabling CIOs to manage the growing number of applications, I believe Cisco and possibly Oracle (ORCL) will eventually pony up the cash for Palo Alto. And I think it's just a matter of time, especially if the stock doesn't find a floor soon.At the time of publication the author had no position in any of the stocks mentioned. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.