Palo Alto Networks (NASDAQ:PANW) Stock Jumps 2.6% - Should You Buy?

Key Points

• Palo Alto Networks shares rose 2.6% to $390.46, near the analyst consensus target of $398.55. The stock carries a “Moderate Buy” consensus rating, with 39 analysts rating it a Buy and 11 a Hold.
• The company exceeded quarterly expectations, reporting $1.02 in EPS versus $0.98 expected and $3.41 billion in revenue versus $3.35 billion forecast; revenue increased 34.5% year over year.
• Despite strong growth and institutional ownership of 79.82%, the stock trades at a very high price-to-earnings ratio of 765.62. Insiders sold approximately $20.8 million of shares over the past three months, a potential cautionary signal for investors.

Palo Alto Networks, Inc. (NASDAQ:PANW - Get Free Report)'s stock price traded up 2.6% on Monday. The stock traded as high as $394.70 and last traded at $390.46. Approximately 5,107,218 shares changed hands during trading, a decline of 37% from the average daily volume of 8,106,674 shares. The stock had previously closed at $380.55.

Analyst Ratings Changes

Several research firms recently issued reports on PANW. Jefferies Financial Group reiterated a "buy" rating and issued a $450.00 target price (up from $335.00) on shares of Palo Alto Networks in a research note on Friday, August 28th. Weiss Ratings upgraded shares of Palo Alto Networks from a "hold (c-)" rating to a "hold (c)" rating in a research report on Thursday, October 8th. Susquehanna lifted their price objective on shares of Palo Alto Networks from $350.00 to $415.00 and gave the company a "positive" rating in a report on Wednesday, September 2nd. Arete Research upped their price objective on shares of Palo Alto Networks from $185.00 to $433.00 and gave the stock a "buy" rating in a research report on Monday, June 29th. Finally, Loop Capital increased their target price on shares of Palo Alto Networks from $290.00 to $350.00 and gave the stock a "hold" rating in a research note on Friday, August 21st. Thirty-nine analysts have rated the stock with a Buy rating and eleven have assigned a Hold rating to the company. Based on data from MarketBeat.com, Palo Alto Networks currently has a consensus rating of "Moderate Buy" and a consensus target price of $398.55.

Palo Alto Networks Stock Up 2.6%

The firm has a market cap of $319.40 billion, a price-to-earnings ratio of 765.62, a PEG ratio of 10.95 and a beta of 0.93. The business has a fifty day simple moving average of $369.33 and a 200 day simple moving average of $308.82. The company has a debt-to-equity ratio of 0.06, a current ratio of 0.87 and a quick ratio of 0.87.

Palo Alto Networks (NASDAQ:PANW - Get Free Report) last issued its quarterly earnings results on Tuesday, September 1st. The network technology company reported $1.02 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.98 by $0.04. The firm had revenue of $3.41 billion for the quarter, compared to analyst estimates of $3.35 billion. Palo Alto Networks had a return on equity of 8.50% and a net margin of 2.67%. The business's revenue was up 34.5% on a year-over-year basis. During the same period in the previous year, the company posted $0.95 earnings per share. 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 analysts forecast that Palo Alto Networks, Inc. will post 2.31 EPS for the current fiscal year.

Insiders Place Their Bets

In other Palo Alto Networks news, Director James J. 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. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, CAO Josh D. Paul sold 900 shares of the company's stock in a transaction on Tuesday, September 1st. The shares were sold at an average price of $373.68, for a total value of $336,312.00. Following the completion of the sale, the chief accounting officer owned 72,484 shares of the company's stock, valued at approximately $27,085,821.12. The trade was a 1.23% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 54,210 shares of company stock worth $20,823,029. 1.40% of the stock is currently owned by insiders.

Institutional Trading of Palo Alto Networks

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Solstein Capital LLC purchased a new position in Palo Alto Networks during the second quarter worth about $26,000. N.E.W. Advisory Services LLC purchased a new stake in shares of Palo Alto Networks during the 2nd quarter valued at approximately $27,000. Delos Wealth Advisors LLC acquired a new position in Palo Alto Networks in the second quarter valued at approximately $28,000. Principia Wealth Advisory LLC lifted its holdings in Palo Alto Networks by 125.0% in the second quarter. Principia Wealth Advisory LLC now owns 81 shares of the network technology company's stock valued at $28,000 after acquiring an additional 45 shares during the last quarter. Finally, Private Wealth Management Group LLC lifted its holdings in Palo Alto Networks by 148.1% in the first quarter. Private Wealth Management Group LLC now owns 201 shares of the network technology company's stock valued at $32,000 after acquiring an additional 120 shares during the last quarter. 79.82% of the stock is owned by institutional investors and hedge funds.

Palo Alto Networks Company Profile

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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