Palo Alto Networks Acquisition Impact and Long-Term Outlook

about 1 month ago

John Quas

"Yeah, I want to I gave it a seven. And I want to give it an incomplete because it does have a $25 billion acquisition of Cyber Arc that hasn't closed yet. And so it's, you know, financials are going to look very different when that deal is closed. There's a cash component of the deal and so the balance sheet's going to look very different and I think financially the, you know, income statement, cash flow are going to look very, very different at the end of this deal. Management doesn't even expect the deal to be accreative to earnings per share until fiscal year 2028. So there is a lot of optimism baked into that deal and I'd really like to see what happens once they've got this thing sorted out."

John provides a cautious assessment of Palo Alto Networks (PNW), highlighting the significant pending $25 billion Cyber Arc acquisition. While he acknowledges the company's strong market position, he warns that the acquisition could drastically alter the company's financial profile, with earnings per share improvements not expected until fiscal year 2028. The commentary suggests that although there is optimism around the deal, investors should remain cautious given the potential for major shifts in the balance sheet and income statement post-acquisition.

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