Palo Alto Networks (NASDAQ:PANW) Stock Falls 3.9% - Time to Sell?

Key Points

• Palo Alto Networks shares fell 3.9% to about $374.74, with trading volume 42% below the average session level.
• Analysts remain broadly positive, with a consensus rating of “Moderate Buy” and an average price target of $390.02; 38 analysts rate the stock a Buy versus 12 Holds.
• The company exceeded quarterly expectations, reporting $1.02 in earnings per share and $3.41 billion in revenue, up 34.5% year over year. However, its valuation remains elevated, including a P/E ratio above 700, while insiders have sold more than $10.5 million in shares over the past 90 days.

Palo Alto Networks, Inc. (NASDAQ:PANW - Get Free Report)'s stock price traded down 3.9% during trading on Friday. The stock traded as low as $373.78 and last traded at $374.74. Approximately 4,852,234 shares were traded during mid-day trading, a decline of 42% from the average session volume of 8,420,320 shares. The stock had previously closed at $389.92.

Analyst Upgrades and Downgrades

A number of research analysts have recently commented on PANW shares. Benchmark raised their target price on Palo Alto Networks from $340.00 to $400.00 and gave the company a "buy" rating in a research note on Monday, August 24th. Citizens Jmp increased their price objective on Palo Alto Networks from $320.00 to $415.00 and gave the stock a "market outperform" rating in a report on Wednesday, August 12th. Wolfe Research reissued an "outperform" rating and set a $320.00 price objective on shares of Palo Alto Networks in a research report on Wednesday, June 3rd. Robert W. Baird set a $420.00 target price on shares of Palo Alto Networks and gave the company an "outperform" rating in a report on Wednesday, September 2nd. Finally, Phillip Securities lowered shares of Palo Alto Networks from a "moderate buy" rating to a "hold" rating and increased their price target for the stock from $320.00 to $346.00 in a research note on Monday, September 7th. Thirty-eight investment analysts have rated the stock with a Buy rating and twelve have issued a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $390.02.

Palo Alto Networks Stock Performance

The business's fifty day moving average price is $355.70 and its 200-day moving average price is $276.07. The stock has a market cap of $306.54 billion, a PE ratio of 734.80, a P/E/G ratio of 10.78 and a beta of 0.91. The company has a debt-to-equity ratio of 0.06, a quick ratio of 0.87 and a current ratio of 0.87.

Palo Alto Networks (NASDAQ:PANW - Get Free Report) last issued its quarterly earnings data 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 net margin of 2.67% and a return on equity of 8.50%. The company had revenue of $3.41 billion for the quarter, compared to the consensus estimate of $3.35 billion. During the same quarter in the prior year, the firm earned $0.95 earnings per share. The firm's revenue for the quarter was up 34.5% compared to the same quarter last year. 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, equities research analysts forecast that Palo Alto Networks, Inc. will post 2.31 EPS for the current fiscal year.

Insider Buying and Selling

In other news, Director Aparna Bawa sold 500 shares of the stock in a transaction that occurred on Tuesday, September 15th. The shares were sold at an average price of $377.18, for a total value of $188,590.00. Following the transaction, the director owned 4,937 shares in the company, valued at $1,862,137.66. This represents a 9.20% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CAO Josh D. Paul sold 900 shares of the stock in a transaction that occurred on Tuesday, September 1st. The stock was sold at an average price of $373.68, for a total transaction of $336,312.00. Following the completion of the transaction, the chief accounting officer owned 72,484 shares in the company, valued at $27,085,821.12. The trade was a 1.23% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 28,322 shares of company stock valued at $10,546,409 over the last ninety days. 1.40% of the stock is owned by insiders.

Hedge Funds Weigh In On Palo Alto Networks

A number of institutional investors have recently bought and sold shares of PANW. QRG Capital Management Inc. raised its stake in shares of Palo Alto Networks by 20.9% in the second quarter. QRG Capital Management Inc. now owns 103,822 shares of the network technology company's stock worth $35,405,000 after buying an additional 17,982 shares during the period. State Street Corp increased its holdings in Palo Alto Networks by 4.2% in the 2nd quarter. State Street Corp now owns 36,979,497 shares of the network technology company's stock worth $12,610,748,000 after acquiring an additional 1,493,179 shares in the last quarter. Wellington Altus USA Inc. lifted its holdings in Palo Alto Networks by 17.8% during the second quarter. Wellington Altus USA Inc. now owns 993 shares of the network technology company's stock valued at $339,000 after purchasing an additional 150 shares in the last quarter. Anchor Investment Management LLC boosted its position in shares of Palo Alto Networks by 90.1% in the second quarter. Anchor Investment Management LLC now owns 325 shares of the network technology company's stock worth $111,000 after purchasing an additional 154 shares during the period. Finally, Reynders McVeigh Capital Management LLC purchased a new stake in shares of Palo Alto Networks in the second quarter worth $382,000. 79.82% of the stock is owned by institutional investors.

Palo Alto Networks Company Profile

Palo Alto Networks, Inc is a cybersecurity company that provides security products and services to businesses, governments and other organizations worldwide. The company helps customers protect networks, cloud environments, endpoints, applications and connected devices from cyber threats.

Its portfolio includes next-generation firewalls and network security technologies, as well as cloud-delivered security solutions such as Prisma Access and Prisma Cloud. Palo Alto Networks also offers Cortex products for endpoint protection, security operations, threat detection and response, and automation.

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