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California-based Palo Alto Networks, Inc. (PANW) provides cybersecurity services and network security solutions to enterprises, service providers, and government entities. Valued at a market cap of $132.7 billion, the company's next-generation firewall products deliver natively integrated application, user, and content visibility and control through its operating system, hardware, and software architecture.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and PANW fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, stability, and influence in the technology sector. The company is renowned for its AI-powered network security, cloud security, and security operations solutions.
This cybersecurity company is currently trading 1.3% below its 52-week high of $408.53, reached on Nov. 13. PANW has gained nearly 17.3% over the past three months, outpacing the Technology Select Sector SPDR Fund’s (XLK) 14.6% gain during the same time frame.
Moreover, in the longer term, PANW has rallied 36.7% on a YTD basis, significantly outpacing XLK’s 24.6% returns. Shares of PANW are up 37.7% over the past 52 weeks, outperforming XLK’s 30.1% gains over the same time frame.
To confirm its bullish trend, PANW has been trading above its 200-day moving average since early August and has remained above its 50-day moving average since early October.
Growing adoption of PANW’s Next-Generation Security platforms, driven by the increasing use of digitization by businesses and industries, coupled with the exponential rise in cyber threats, have contributed to PANW's impressive performance.
PANW shares gained 1.2% after its Q1 earnings release. Its revenue grew 14% year-over-year to $2.14 billion and exceeded the Wall Street estimates of $2.12 billion, while its adjusted EPS of $1.56 increased 13% from the year-ago figure and transcended the estimates by 5.4%. Moreover, the company raised its Q2 and full-year revenue and EPS guidance, which might have further enhanced investor confidence. PANW also announced a two-for-one stock split effective on Dec. 13.
However, PANW has significantly lagged behind its rival, Fortinet, Inc. (FTNT), which rallied 87.5% over the past 52 weeks and 68.2% on a YTD basis.
Looking at PANW’s recent outperformance relative to the broader sector, analysts remain strongly optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 47 analysts covering it, and the mean price target of $415.59 suggests a 3.1% premium to its current levels.
