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With a market cap of $103.5 billion, Palo Alto Networks, Inc. (PANW) is a global leader in the cybersecurity sector based in Santa Clara, California. The company delivers advanced firewall appliances, security management solutions, and comprehensive subscription services to enterprises, service providers, and government entities worldwide.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Palo Alto Networks fits this criterion perfectly. PANW is renowned for its pioneering next-generation firewall technology and integrated cybersecurity solutions, significantly bolstered by its Unit 42 threat intelligence and strong presence in cloud security, serving as a key player in safeguarding enterprises globally.
However, the cybersecurity provider has slipped 19.4% from its 52-week high of $380.84, achieved on Feb. 9. However, shares of Palo Alto have surged 9.8% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) 8.9% gain over the same time frame.
Longer term, PANW stock has gained around 36.4% over the past 52 weeks, overshadowing NASX's 29.8% gains over the same time frame. However, PANW is up 8.1% on a YTD basis, lagging behind the NASX's 17.4% gains.
PANW has been trading above its 200-day moving average since June last year and has remained mostly above its 50-day moving average during this period despite some fluctuations, indicating a bullish price trend.
Palo Alto Networks' impressive market performance over the past year stems from rising demand for its cybersecurity solutions, driven by strong revenue growth from cloud-based and AI-driven platforms, alongside consistent profitability and effective cost management. However, following the company’s Q3 earnings results on May 20, the stock fell 3.7% in its subsequent trading session due to concerns over a largely in-line Q4 billings forecast and deferred customer payments stemming from the company's platformization strategy amid higher borrowing costs.
Nevertheless, to emphasize the stock’s outperformance, rival Fortinet, Inc. (FTNT) is underperforming – not just PANW but the broader equity benchmark. Shares of Fortinet have declined 14.5% over the past 52 weeks but are up 3.1% on a YTD basis.
As the stock has soared in price action, analysts remain optimistic about its prospects. Among the 43 analysts covering the stock, there is a consensus rating of “Strong Buy,” and the mean price target of $339.58 is a premium of just 6.2% to current levels.
On the date of publication, Sohini Mondal 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.
