派拓网络：Cybersecurity giant poised for new round of growth

Investment Rating - Initiate coverage with a BUY rating and a target price of US$391.7 per share, representing a 19.9% upside from the current price of US$326.81 [3][2]. Core Insights - Palo Alto Networks (PANW) is positioned to benefit from the increasing demand for cybersecurity solutions, with a projected revenue CAGR of 16% from FY23 to FY26 and a non-GAAP net profit CAGR of 23% during the same period [2][10]. - The total addressable market (TAM) for PANW's key sectors—network security, cloud security, and Security Operation Center (SOC)—has grown from US$38 billion in 2018 to US$104 billion in 2023, with expectations to reach US$210 billion by 2028, driven by the adoption of Secure Access Service Edge (SASE) and cloud security [2][10][27]. - PANW's strong financial profile adheres to the "Rule of 50," indicating a balanced growth in revenue and profitability, which supports its valuation [2][14]. Cybersecurity Market Overview - The cybersecurity market is experiencing significant growth, with the TAM for PANW's sectors expected to expand at a CAGR of 15% from 2023 to 2028 [2][10]. - The demand for cybersecurity solutions is driven by an increasingly complex threat landscape, with cybercrimes costing the global economy US$8 trillion annually [28][27]. Company Positioning - PANW has been recognized as a leader in 23 product categories across network security, cloud security, and SOC, which enhances its competitive edge and market share [11][2]. - As of 2QFY24, 79% of Global 2000 customers have engaged with PANW on at least two platforms, indicating strong customer loyalty and product integration [11][2]. Platformization Strategy - The acceleration of PANW's Platformization strategy is expected to enhance market share gains, despite potential short-term impacts on billings and revenue growth [12][2]. - The strategy aims to improve customer total cost of ownership (TCO) and return on investment (ROI) by consolidating multiple cybersecurity solutions into a unified platform [27][12]. Growth Opportunities - PANW is poised to capitalize on the growing opportunities related to Generative AI, which could increase demand for its products and services while also allowing for potential price increases due to improved user experience and operational efficiency [13][2]. - The company is also focusing on international expansion and the adoption of next-generation security products to drive future revenue growth [12][2]. Financial Performance - PANW's revenue is projected to grow from US$6.9 billion in FY23 to US$10.8 billion by FY26, with a consistent year-over-year growth rate [7][2]. - The company has a strong financial profile, with a non-GAAP adjusted net profit expected to increase from US$1.4 billion in FY23 to US$2.7 billion by FY26 [7][2].