Palo Alto Networks (NASDAQ:PANW) Shares Gap Down - Should You Sell?

Key Points

• Palo Alto Networks shares fell sharply, opening at $368.83 versus a prior close of $394.49 and later trading near $373.26, a roughly 4% decline.
• Despite the pullback, analyst sentiment remains positive: 39 analysts rate the stock a Buy, 11 rate it Hold, and the consensus price target is $398.55.
• The company reported quarterly revenue of $3.41 billion and earnings of $1.02 per share, exceeding estimates, while insiders sold about $20.8 million of stock during the last quarter.

Palo Alto Networks, Inc. (NASDAQ:PANW - Get Free Report)'s share price gapped down before the market opened on Thursday. The stock had previously closed at $394.49, but opened at $368.83. Palo Alto Networks shares last traded at $373.2590, with a volume of 2,493,029 shares.

Wall Street Analysts Forecast Growth

PANW has been the subject of several recent analyst reports. BTIG Research upped their target price on Palo Alto Networks from $404.00 to $425.00 and gave the stock a "buy" rating in a research note on Monday, September 28th. Yorkville Ives started coverage on Palo Alto Networks in a research report on Monday, October 5th. They set an "outperform" rating and a $500.00 price objective for the company. Robert W. Baird set a $420.00 target price on Palo Alto Networks and gave the company an "outperform" rating in a research report on Wednesday, September 2nd. Tigress Financial boosted their target price on Palo Alto Networks from $245.00 to $430.00 and gave the stock a "buy" rating in a research note on Wednesday, July 15th. Finally, Evercore reissued an "outperform" rating on shares of Palo Alto Networks in a report on Monday, August 31st. Thirty-nine investment analysts have rated the stock with a Buy rating and eleven have issued a Hold rating to the company's stock. According to MarketBeat.com, Palo Alto Networks currently has an average rating of "Moderate Buy" and an average price target of $398.55.

Palo Alto Networks Stock Down 4.0%

The company has a market cap of $309.71 billion, a P/E ratio of 740.40, a PEG ratio of 10.95 and a beta of 0.93. The stock's 50-day moving average price is $371.40 and its 200-day moving average price is $268.05. The company has a current ratio of 0.87, a quick ratio of 0.87 and a debt-to-equity ratio of 0.06.

Palo Alto Networks (NASDAQ:PANW - Get Free Report) last posted its earnings results on Tuesday, September 1st. The network technology company reported $1.02 earnings per share for the quarter, beating analysts' consensus estimates of $0.98 by $0.04. Palo Alto Networks had a return on equity of 8.50% and a net margin of 2.67%. The company had revenue of $3.41 billion for the quarter, compared to analyst estimates of $3.35 billion. During the same quarter last year, the company earned $0.95 earnings per share. The company's revenue for the quarter was up 34.5% on a year-over-year basis. Palo Alto Networks has set its FY 2027 guidance at 4.160-4.190 EPS and its Q1 2027 guidance at 0.960-0.980 EPS. As a group, research analysts forecast that Palo Alto Networks, Inc. will post 2.32 EPS for the current year.

Insider Buying and Selling at Palo Alto Networks

In other news, Director Aparna Bawa sold 250 shares of the stock in a transaction dated Friday, October 9th. The stock was sold at an average price of $412.28, for a total transaction of $103,070.00. Following the transaction, the director directly owned 4,427 shares in the company, valued at approximately $1,825,163.56. This represents a 5.35% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, Director James Goetz sold 20,000 shares of the business's stock in a transaction on Thursday, September 17th. The stock was sold at an average price of $376.68, for a total transaction of $7,533,600.00. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 54,210 shares of company stock valued at $20,823,029 over the last quarter. Company insiders own 1.40% of the company's stock.

Institutional Investors Weigh In On Palo Alto Networks

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Verus Financial Partners Inc. increased its holdings in Palo Alto Networks by 4.3% during the third quarter. Verus Financial Partners Inc. now owns 632 shares of the network technology company's stock valued at $251,000 after buying an additional 26 shares during the last quarter. Consilium Wealth Advisory LLC grew its position in shares of Palo Alto Networks by 2.5% during the 3rd quarter. Consilium Wealth Advisory LLC now owns 1,117 shares of the network technology company's stock valued at $444,000 after acquiring an additional 27 shares during the period. Grove Bank & Trust increased its stake in shares of Palo Alto Networks by 7.0% in the 3rd quarter. Grove Bank & Trust now owns 472 shares of the network technology company's stock worth $188,000 after purchasing an additional 31 shares in the last quarter. Riversedge Advisors LLC increased its stake in shares of Palo Alto Networks by 2.5% in the 3rd quarter. Riversedge Advisors LLC now owns 1,285 shares of the network technology company's stock worth $511,000 after purchasing an additional 31 shares in the last quarter. Finally, Tenon Financial LLC raised its holdings in Palo Alto Networks by 5.3% in the 3rd quarter. Tenon Financial LLC now owns 661 shares of the network technology company's stock worth $263,000 after purchasing an additional 33 shares during the period. 79.82% of the stock is owned by hedge funds and other institutional investors.

About Palo Alto Networks

Palo Alto Networks, Inc NASDAQ: PANW is a global cybersecurity company that helps organizations protect networks, cloud environments, endpoints, and digital infrastructure. Its offerings are designed to prevent cyberattacks, identify security risks, monitor activity, and support incident response across enterprise, government, and service-provider environments.

The company's portfolio includes network security products such as next-generation firewalls and security operations tools; Prisma, its cloud security platform; and Cortex, a suite focused on endpoint protection, threat detection, security analytics, and automated response.

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