NEW YORK ( TheStreet) -- Another quarter is in the books for Palo Alto Networks ( PANW) and it seems that all of the excitement surrounding the company's IPO has vanished. With the stock making new 52-week lows every other session, I'm beginning to wonder if the company will ever find a bottom.Despite recent declines the stock is still priced at a premium relative to rivals such as Check Point Software ( CHKP) and Fortinet ( FTNT). On the other hand, a 30% drop in two months makes the shares very appealing at $49. But did the company do enough in its Q1 earnings report to convince investors that current valuation is anything but a trap? It's hard to downplay a quarter during which revenue soared 50% year-over-year to $85.9 million and grew sequentially by 14%. Palo Alto also grew its customer base by 1,000 to more than 10,000 -- a pretty remarkable accomplishment for such a young company. It seems that early investors have gotten satisfied with their gains which soared as high as 30% since its first day of trading. Investors are ready to move on. While I can also appreciate some possible tax selling, still, it's hard to dump shares of a company that is growing at a 50% annual rate. Equally impressive, Palo Alto saw a 30% year-over-year jump in product revenue, which also grew 12% sequentially. Likewise services revenue soared 113%. These figures indicate that the company is stealing market share from the competition, which doesn't explain why the stock has been sliding. Then again, profitability might have been a legitimate concern. Non-GAAP net income of $2.9 million during the quarter was considerably lower than the $5.6 million the company earned a year ago. From that standpoint, Palo Alto met its targets. But for a stock that trades at such a premium it's nonetheless disturbing that net income is trending downward. It did not help investors' confidence that gross margins shed 217 basis points year-over-year, although the company did manage to improve gross margins sequentially by 70 basis points. Relative to expectations it was a good quarter, and management thinks the next quarter might be better.