A class action lawsuit was filed against Palo Alto Networks (NASDAQ:PANW) on February 26, 2024. The plaintiffs (shareholders) alleged that they bought Palo Alto Networks’ stock at artificially inflated prices between August 18, 2023 and February 20, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought PANW stock during that period can learn about joining the lawsuit here: https://zlk.com/pslra-1/palo-alto-networks-lawsuit-submission-form?wire=16
California-based Palo Alto Networks is an American multinational cybersecurity firm. The plaintiffs maintain that the company and three of its senior officers have deceived investors by repeatedly lying and withholding crucial information about the company’s business practices, financial standing, and prospects during the Class Period.
The information became clear on February 20, after the market closed, when the company significantly cut its Q3 FY24 and the full-year Fiscal 2024 guidance for billings and revenue. The company cited a shortfall in the U.S. Federal government business that started in Q1 FY24 and worsened in Q2 as a reason for the guidance revision.
Interestingly, in previous earnings calls the company time and again reiterated that its platformization was continuing to drive large deal momentum. Also, the company noted that it had signed a $25 million expansion transaction with a federal government agency, which had now spent over $100 million over its lifetime on PANW’s platform.
As per the class action lawsuit, Palo Alto Networks caused PANW stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the efficacy of certain business initiatives and ancillary issues.
Notably, on February 21, PANW stock collapsed 28.4%. That said, the stock soared nearly 75% during the Class Period.
