Palo Alto Networks PANW recently announced that it has inked a deal to acquire Cider Security for $195 million in cash, excluding the value of replacement equity awards, subject to adjustment. The deal is expected to close during the company's second quarter of fiscal 2023 and is not expected to have any material impact on the company's financials.
Tel Aviv-Yafo, the Israel-based Cider Security company, provides application security (AppSec) and software supply-chain security solutions, which offer continuous integration/continuous delivery platforms from a single place. These allow IT teams to build AppSec programs more securely. Therefore, Cider Security platforms help bridge the gap between security and the engineering of applications.
Lee Klarich, the chief product officer for Palo Alto, stated that "Any organization using public cloud has an application infrastructure with hundreds of tools and applications that can access their code and yet, they have limited visibility to their configuration or if they are secured." He further added, "Cider has made it possible to connect into infrastructure, analyze the tools, and identify the risks, as well as how to remediate them. We are acquiring Cider for their innovation that will help enable Prisma Cloud to provide this capability that anyone doing cloud operations has to have."
Palo Alto Networks, Inc. Price and Consensus
Palo Alto Networks, Inc. price-consensus-chart | Palo Alto Networks, Inc. Quote
Palo Alto’s Focus on Prisma Cloud Capabilities
The Prisma Cloud platform brings all of Palo Alto’s cloud security solutions under one umbrella to meet the need for end-to-end networking and security solutions. This enables enterprises to better focus on business growth without worrying about security loopholes in the system.
With the Cider Security acquisition, Palo Alto will fortify its Prisma Cloud platform capabilities. These will enable it to help developers get security assessments throughout the entire application security lifecycle, from code to the cloud.
Palo Alto has been continuously focusing on strengthening the Prisma Cloud platform’s comprehensive cloud security capabilities through acquisitions and the addition of new tools and features. Last month, the company added software composition analysis tools to Prisma Cloud.
By combining Cider Security’s solutions with the newly launched software composition analysis tools, Prisma Cloud will now offer the industry's most comprehensive supply-chain security solution as part of its code-to-cloud security platform.
Last year, the company acquired Bridgecrew. The acquisition not only strengthened the Prisma Cloud platform’s comprehensive cloud security capabilities but also made PANW the first company to provide end-to-end security across the full application lifecycle.
Acquisition Strategy Bodes Well
Palo Alto’s strategy of undertaking acquisitions to boost growth is long documented. The company has made 18 acquisitions, with investments of more than $3.5 billion.
These buyouts have helped Palo Alto expand its product portfolio and customer base, thereby bringing in incremental revenues. Markedly, it has registered stellar double-digit revenue growth in the trailing six years.
In the first-quarter fiscal 2023 earnings release, Palo Alto’s revenues soared 25% year over year to $1.56 billion. The company has a cash-healthy balance sheet, which enables it to pursue acquisitions. Despite so many acquisitions, the company had cash and investments of nearly $3.8 billion as of Oct 31, 2022.
Zacks Rank & Other Stocks to Consider
Palo Alto currently carries a Zacks Rank #2 (Buy). Shares of PANW have decreased 9.7% year to date (YTD).
Some other top-ranked stocks worth considering from the broader technology sector are Celestica CLS, Zscaler ZS and Coupa Software COUP. Celestica sports a Zacks Rank #1 (Strong Buy) at present, while Zscaler and Coupa each carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 9.4% up to $1.86 per share in the past 30 days.
CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have increased 0.6% YTD.
The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 5 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved a penny north to $1.18 per share in the past 60 days.
ZS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 56.8% YTD.
The Zacks Consensus Estimate for Coupa's fourth-quarter fiscal 2023 earnings has been revised 3 cents northward to 7 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved upward by 19 cents to 44 cents per share in the past 90 days.
Coupa's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 478.1%. Shares of COUP have slumped 71% YTD.
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