Why Palo Alto Networks, Inc. Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our thesis.

What: Shares of Palo Alto Networks, rose more than 11% Thursday after the company announced a favorable court ruling in a patent infringement case brought by Juniper Networks.

So what: Specifically, Palo Alto announced a U.S. District Court has rejected Juniper's motion for summary judgment of patent infringement. Instead, the court granted, in part, several of Palo Alto Networks' motions for summary judgment of non-infringement based on the doctrine of equivalents. What's more, Palo Alto Networks received favorable decisions on claim construction regarding the patents.

Now what: The decision paves the way for a trial, during which Palo Alto Networks CEO Mark McLaughlin insists they "look forward to proving [...] that we do not infringe the Juniper patents."

Even so, and keeping in mind that shares aren't exactly cheap trading around 90 times next year's estimated earnings, I still prefer to remain on the sidelines until the infringement suit is fully resolved.

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The article Why Palo Alto Networks, Inc. Shares Popped originally appeared on Fool.com.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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