With a market cap of $104.1 billion, California-based Palo Alto Networks, Inc. (PANW) provides cybersecurity solutions worldwide, including next-generation firewalls that provide deep visibility and control over applications, users, and content. The company’s products protect against various threats while simplifying IT security infrastructure and reducing costs.
Shares of this cybersecurity giant have outperformed the broader market over the past 52 weeks. PANW stock has soared 57.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 28.9%. However, in 2024, PANW’s shares are up 9.1%, compared to SPX's 11.2% gains on a YTD basis.
Zooming in further, PANW has also outpaced the iShares Cybersecurity And Tech ETF’s (IHAK) 28.6% gains over the past 52 weeks.
Palo Alto Networks' impressive market performance over the past year stems from rising demand for its cybersecurity solutions. Furthermore, the company has strengthened its position by incorporating artificial intelligence (AI) into its security offerings, boosting both its growth potential and investor sentiment toward the company.
However, the company’s shares faced a setback following its Q3 earnings results reported on May 20. Despite beating projections, the company’s narrowed billing guidance for fiscal 2024 did not sit well with investors, sending its shares plunging 3.7% in the subsequent trading session.
For the current fiscal year, ending in July, analysts expect PANW’s EPS to grow by a notable 55% to $2.79. Plus, the company has an impressive earnings surprise history. It beat the consensus estimate in each of the last four quarters.
Among the 41 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 28 “Strong Buy” ratings, two “Moderate Buy,” and 11 “Hold.”
This configuration is slightly more bullish than three months before, with 27 analysts suggesting a "Strong Buy."
Following the company’s Q3 performance, on May 24, RBC Capital Markets reaffirmed its “Outperform” rating on PANW and assigned a price target of $360, which implies a potential upside of nearly 11.9% from the current price levels. This bullish sentiment toward the stock is supported by management's confidence in the Q3 results, successful initial platformization efforts, and a strong Q4 backlog.
The mean price target of $331.90 represents a premium of just 3.2% to PANW’s current levels. The Street-high price target of $415 implies that the stock could rally as much as 29%.
On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
