Munger Mode rating: 3 out of 5 — Hold. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
An Independent Research Assessment in the Spirit of Buffett & Munger We will say at the outset what we will spend the rest of this letter defending: Palo Alto Networks is a genuinely good business, run by a genuinely capable man, in a genuinely durable industry. None of that is in dispute. What is in dispute is whether a wonderful franchise is on offer here at a sensible price — and whether the economics the company reports are the economics its owners actually keep. On both counts we have reservations large enough to keep our checkbook in our pocket. We would not sell a share we already owned. We would not buy the first one today. That is the whole report in three sentences. The rest is arithmetic and judgment. Palo Alto Networks sells cybersecurity. At its founding it sold a better firewall — a box that sat at the edge of a corporate network and decided what traffic to let through.
Recent filings analysed: 8-K (2026-09-01), 8-K (2026-08-21), 10-Q (2026-06-03), 8-K (2026-06-02).
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