Is PANW Stock a Buy After Earnings? 4 Analysts Weigh In on Palo Alto Networks.


It’s been a good day for Palo Alto Networks (NASDAQ:PANW) so far. Indeed, shares of PANW stock are up over 3% after the cybersecurity company reported earnings for the quarter ended Jan. 31. Revenue came in at $1.3 billion, which was up over 30% year-over-year (YOY). In addition, the revenue figure came above the company’s own guidance, as well as the consensus estimate of $1.28 billion. Even better, the company raised its revenue guidance for fiscal Q3 to be between $1.345 billion and $1.365 billion.

Palo Alto Networks (PANW) building with blue logo on side with blue sky backdrop
Source: Shutterstock

Palo Alto Networks CEO and Chairman Nikesh Arora commented on the company’s performance, adding that:

“In Q2, our company continued to benefit from strength across our three security platforms, driven by strong cybersecurity demand, organizations architecting for hybrid work and growing their hyper-scale cloud footprints. On the back of this strength, notably in our next-generation security offerings, we are raising our guidance for the year across revenue, billings, and earnings per share.”

In response to the released earnings, JPMorgan upgraded PANW stock from underweight to neutral and raised its price target from $600 to $620. Analyst Sterling Auty believes that PANW is gaining market share against legacy incumbents Check Point Software (NASDAQ:CHKP) and Cisco (NASDAQ:CSCO). In addition, the analyst believes Palo Alto’s cloud acquisitions have helped the company build a strong cloud portfolio. Auty adds that the neutral rating is based on the risk of “on premise appliance demand fading.”

With JPMorgan bullish on the cybersecurity firm, let’s take a look at how the rest of Wall Street feels.

3 More Analysts Weigh In on PANW Stock

  • BMO Capital has a price target of $630. Like Auty, analyst Keith Bachman raised his price target after reviewing Q2 earnings. Bachman was impressed with the earnings, commenting: “PANW delivered a solid quarter all around, with ~6% upside to billings and ~3% upside to revenues.” Furthermore, the analyst calls Palo Alto a top pick and believes that the stock’s valuation is reasonable at current levels.
  • Guggenheim has a price target of $625. Analyst Imtiaz Koujalgi reiterated his buy rating and $625 price target after conducting channel checks before earnings. The analyst noted that Palo Alto should be able to guide above its fiscal Q3 revenue estimates, which it did. Finally, Koujalgi adds that PANW stock is “relatively inexpensive” given its 25%+ top-line growth.
  • JMP Securities has a price target of $620. Analyst Trevor Walsh states several reasons why PANW stock is a great investment. First, the company is in an excellent position to take advantage of the rise of “Zero Trust frameworks and Secure Access Service Edge (SASE) models.” In addition, the company has a competent management team that has proven to be capable of both organic and inorganic growth. Finally, Walsh adds that PANW has a strong leadership position in the network security domain.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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