Morningstar Raises PANW Fair Value to $285, CRWD to $530 and Flags 40% AVGO Discount
MORN•Morningstar raised Palo Alto Networks’ fair value to $285 after Q3 revenue of $3.0 billion and a $0.85 EPS beat, lifted CrowdStrike’s fair value to $530 following $1.39 billion in revenue, and flagged Broadcom’s 12% post-earnings drop as a 40% discount. AI-driven firewall and detection demand suggests stronger revenue growth potential for Morningstar’s research services.
1. Fair Value Raises for PANW and CRWD
Morningstar raised Palo Alto Networks’ fair value to $285 after Q3 adjusted EPS of $0.85 and $3.0 billion in revenue, noting a 36% increase in remaining performance obligations to $18.4 billion and a 60% rise in security annual recurring revenue to $8.1 billion. The research firm also lifted CrowdStrike’s fair value to $530 following a $1.10 adjusted EPS, $1.39 billion in revenue and quarterly ARR growth exceeding 250%, while retaining 3-star and 2-star ratings respectively.
2. Broadcom Discount Opportunity
Broadcom reported earnings and revenue above estimates and guided above expectations, yet its shares fell over 12% post-release. Morningstar views this sell-off as a buying opportunity, pegging Broadcom at a 40% discount to its intrinsic value and naming it its top pick among covered large-cap technology names.
3. Research Growth Implications
Emphasis on AI-driven firewall demand from data center buildouts and advanced detection services underscores robust market tailwinds. This dynamic is expected to drive increased client demand for Morningstar’s real-time research and analytics, bolstering potential growth in its subscription-based revenue streams.
