Shortly after the opening bell, we will buy 25 shares of Palo Alto Networks at roughly $287.80. Following the trade, Jim Cramer’s Charitable Trust will own 275 shares of PANW, increasing our weighting in the portfolio to 2.36% from 2.15%. Now that we are no longer restricted from trading Palo Alto Networks shares, we finally can buy the stock, which sold off after its earnings report last week . We upgraded our rating to a 1 after PANW fell more than 20% in reaction to a $600 million cut to the cybersecurity company’s full-year billings guidance and further caution around near-term billings and revenue growth due to an aggressive push of its platformization strategy. We thought the magnitude of this decline was an overreaction, and therefore a buying opportunity for long-term investors. This strategy shift will indeed lead to a dip in key metrics like billings and revenue growth over the short term due to higher discounting, but over the long run, the benefits look promising. The company expects this change will accelerate migration to Palo Alto’s platform, leading to larger deals with longer contracts and stickier contract relationships. Ultimately, management says this strategy will lead to sustainably higher top-line growth for longer. We agree, and as Morgan Stanley analysts called it in its post-quarter analysis, this is “short-term pain for long-term gain.” And sure, this stock has moved up a quick $20 from its close on Wednesday, narrowing the discount on the 25 shares we sold at the start of the year and are buying back here. But we continue to see Palo Alto’s sharp decline from $366 per share before earnings as a great buying opportunity for the number one provider of cybersecurity solutions. (Jim Cramer’s Charitable Trust is long PANW. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying…
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