Palo Alto Networks has delivered a very large 5 year return, yet its current valuation checks suggest the stock is trading at a premium rather than as an obvious bargain. After a sharp multi year run and recent enthusiasm around AI driven cybersecurity, both market based multiples and an intrinsic value estimate using a Discounted Cash Flow (DCF) approach point to an overvalued picture.

• Palo Alto Networks has returned roughly 5.3x over 5 years, which sets a high bar for any further upside from today’s price.
• Investor expectations around AI related cybersecurity demand and new offerings such as Unit 42 Frontier AI Defense can support a rich valuation. At the same time, the cybersecurity review of its products in China may add an extra…