Palo Alto Networks touched an entry point in intraday trading on Monday as one analyst called the cybersecurity stock 'controversial.' Fiscal second quarter earnings for Palo Alto stock are due Thursday.
"Shares are controversial into the print given three recent downgrades and growing uncertainty regarding federal spend," said TD Cowen analyst Shaul Eyal in a report published Monday. "While awaiting management to address federal spend, we believe overall solid demand outweighs concerns."
On the stock market today, Palo Alto hit a high of 198.65 in intraday trading then wavered a bit. In morning trading, PANW stock was up 1.8% to near 197.44. Meanwhile, Palo Alto stock holds an entry point of 197.74.
Palo Alto Battles In The Firewall Market
Further, Palo Alto Networks competes in the network firewall market versus Fortinet and others. Fortinet reported earnings last week and indicated firewall network sales may be rebounding.
Firewall appliances protect computer networks by blocking online intrusions and monitoring Web-based apps.
At RBC Capital, analyst Matthew Hedberg said in a report: "Based on positive checks, we look for slight upside to estimates."
Analysts polled by FactSet project fiscal Q2 EPS of 78 cents, up 7%, on revenue of $2.239 billion, up 13%.
Chief Executive Nikesh Arora has leaned into a cloud platform strategy to drive next generation annual recurring revenue growth.
TD Cowen's Eyal added: "Following positive results from Check Point Software Technologies and Fortinet and mixed PANW sentiment from investors, we look for results to be slightly better than expectations."
Palo Alto Stock: Technical Ratings
Heading into the Palo Alto earnings report, PANW stock has climbed 8% in 2025. Also, the company in December announced a 2-for-1 stock split.
With earnings due Thursday, investors may want to be cautious ahead of the report. One strategy around earnings would be to use call options. That approach would let investors cap their possible loss while still letting them participate in any post-earnings upside.
In addition, Palo Alto has built a broad cloud-based security platform through acquisitions. Slower billings growth has been an overhang on the cybersecurity stock.
Palo Alto stock holds an IBD Composite Rating of 94 out of 99, according to IBD Stock Checkup. Meanwhile, Palo Alto Networks is among AI stocks to watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
