Crack Into These Cybersecurity Firms

Billy Fitzsimmons: We recently re-evaluated our entire cybersecurity coverage list. And in doing so, we took a fresh look at Palo Alto Networks. We still maintained the no-moat rating, but we upgraded the trend to positive from stable. Overall, we think there's two major trends affecting cybersecurity vendors like Palo Alto Networks. First, complexity and second, consolidation.

It used to be that network security vendors were creating firewall services whether physical or virtual. Today, the vectors of attack for enterprises is becoming much more complex. You have firewall, you have SaaS, you have endpoint security, cloud security. They are making the enterprise security efforts much more byzantine. You need multiple solutions to protect yourself from all those vectors.