Palo Alto Networks Buys Evident.io, Enhances API Security

Palo Alto Networks, Inc. PANW recently announced that it has entered into a definitive agreement to acquire public could security provider, Evident.io in an all-cash transaction worth $300 million. Subject to customary closing conditions, the deal is expected to be completed during the ongoing quarter.

Integration of the acquired entity is expected to enhance the company’s API-based security solutions, ensuring safe cloud-based deployments and constant monitoring of the projects. Additionally, Palo Alto’s talent pool will be strengthened by the addition of Evident.io's co-founders, Tim Prendergast and Justin Lundy to its management.

Given the accelerated rate of cloud infrastructure adoption by enterprises, the need for securing data transfer and storage has also increased massively. Per Gartner, the cloud- based security market is expected to reach $8.9 billion by 2020 from $5.9 billion in 2017.

We believe that the company’s innovative product suite coupled with the enhancements through the acquisitions will enable it to make the most of the growth opportunity. This will eventually be beneficial for the top line.

Notably, Palo Alto is growing rapidly on the back of its innovative next-generation security platforms. Over the last two years, the company launched several subscription-based products, including WildFire, AutoFocus, Aperture, Traps and Virtual, which have been witnessing strong adoption among organizations.

The company’s acquisitions have also added significantly to the solutions suite. In February 2017, Palo Alto completed the buyout of LightCyber for $105 million. The acquisition has expanded the company’s Next-Generation Security Platform. In the last few years, the company has completed three important buyouts to broaden its portfolio and global reach.

Notably, in second-quarter fiscal 2018, the company added nearly 3,000 customers, bringing the total to more than 48,000 worldwide. It should be noted that in each of the last 24 quarters, Palo Alto has added at least 1,000 customers.

Palo Alto Networks’ revenues for the second quarter of fiscal 2018 of $542.4 million outpaced the Zacks Consensus Estimate and recorded significant year-over-year improvement.

 

Palo Alto Networks, Inc. Revenue (TTM)

Palo Alto Networks, Inc. Revenue (TTM) | Palo Alto Networks, Inc. Quote

 

Additionally, the company’s partnerships with the likes of Amazon’s AMZN Amazon Web Services and Alphabet’s GOOGL Google Cloud and VMWare VMW are expected to be further growth boosters.

Palo Alto Networks carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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