A software update last week by CrowdStrike sparked a global tech outage that sent shares of CrowdStrike stock plummeting. While CrowdStrike crumbled, cybersecurity giant Palo Alto Networks continued to set up a new base, with PANW stock targeting a 345.90 buy point.
Palo Alto Among 3 Cybersecurity Firms On Breakout Index
While CrowdStrike continues to deal with the aftermath of last week's crash, Palo Alto Networks has joined two fellow cybersecurity firms on the IBD Breakout Stocks Index, which gets updated weekly. CyberArk Software and Gen Digital also made this stock screen.
Although the stock market indexes have come under pressure, these three cybersecurity stocks remain within striking distance of their buy zones.
Since bouncing back above its 50-day moving average at the end of April, Palo Alto stock held support at that benchmark line. While still above the 50-day line, the stock lost support at its 21-day exponential moving average on Wednesday.
Palo Alto Networks has built a third-stage consolidation pattern with a 345.90 entry in a third-stage consolidation pattern.
The relative strength line began to fall sharply in February as the company gapped down 28% on earnings. Look for the RS line to perk up as the buy point nears.
Meanwhile, Gen Digital has teased but failed to reclaim a 25.61 entry. Like Palo Alto, CyberArk fell again Wednesday, but remains above its 50-day line.
CrowdStrike is down over 15% for the week as of Wednesday's close after falling nearly 18% last week.
See Who Joins PANW Stock, CYBR On The IBD Breakout Stocks Index
Palo Alto Stock Retreats, Then Rebounds On Earnings
Headquartered in Santa Clara, Calif., Palo Alto Networks is a global cybersecurity giant with more than 80,000 enterprise customers worldwide.
As artificial intelligence adds new challenges to companies already facing cybersecurity threats to their networks, Palo Alto Networks offers Precision AI. The idea is to fight AI with AI using a rich security data set. The goal of Precision AI is to identify and block AI-generated attacks while also simplifying cybersecurity using AI copilots to assist users.
Palo Alto Networks rebounded from a sharp 28% gap down following its February earnings report. The drop came on fears that Palo Alto Networks would spark a price war. CyberArk and CrowdStrike also got rattled. In its next quarterly report in May, Palo Alto beat views, but acquisition costs lowered its profit outlook.
With the stock rebounding toward a buy point, Palo Alto Networks is expected to next report in early September.
For the upcoming quarter, analysts expect the company to break the $2 billion revenue mark, forecasting an 11% gain to sales of $2.16 billion. While Palo Alto stock analysts expect a 2% slowdown in earnings to $1.41 per share next quarter, they predict 26% growth to $5.58 a share for the full fiscal year.
IBD Breakout Opportunities
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
