Palo Alto Networks (PANW) gave investors a reason to breathe easier. After weeks of concern around its pricey CyberArk acquisition, the cybersecurity leader delivered strong quarterly results and upbeat guidance that sent the stock higher in after-hours trading.
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The latest earnings results not only lifted Palo Alto’s stock but also brought a wave of fresh analyst commentary.
Analysts Back Palo Alto after Strong Quarter
Shrenik Kothari of Robert W. Baird maintained a Buy rating and set a $230 price target, citing the company’s strong financial performance and growth prospects.
He highlighted Palo Alto’s robust fourth-quarter numbers, including a 32% year-over-year increase in Next-Generation Security annual recurring revenue, which came in ahead of guidance and Wall Street expectations. Kothari also pointed to the company’s 24% growth in remaining performance obligations, another sign of strong demand.
Other analysts echoed that optimism. Truist Financial’s Junaid Siddiqui reiterated a Buy rating with a $205 target, while Cantor Fitzgerald’s Jonathan Ruykhaver also placed a Buy rating earlier in the week. UBS, however, struck a more cautious tone by maintaining a Hold rating.
Earnings Beat Helps Shift Focus
Coming into earnings, there was real worry that Palo Alto would fall into the same trap as other tech names this season, solid numbers met with a harsh market reaction. Instead, the company beat Wall Street expectations across the board.
Revenue for the fourth quarter rose 16% year-over-year to $2.54 billion, topping forecasts. Adjusted earnings per share also came in ahead of estimates, climbing 7.3% above consensus. The company’s backlog grew to $15.8 billion, up 24% from last year, another sign that demand for its security offerings remains strong.
Those results helped the PANW stock pop 5% in after-hours trading, a sharp contrast to the 10% slide it took when the CyberArk deal was first announced.
CyberArk Deal Still Looms Large
On July 30, Palo Alto announced plans to buy CyberArk Software in a transaction valued at a hefty premium. CyberArk shareholders would receive $45 in cash and 2.2005 Palo Alto shares for each of their own. While the move would extend Palo Alto’s reach into identity security, a fast-growing corner of the market, investors balked at the price tag and the dilution it implied.
Shares fell quickly after the news, losing 10% in two days. Many investors worried the deal would overshadow Palo Alto’s core strength in network and cloud security. Now, the company’s strong quarter gives management room to make its case for why the deal fits into the bigger picture.
CEO Pushes “Platformization” Strategy
On the earnings call, CEO Nikesh Arora laid out the company’s long-term strategy. He argued that enterprises are increasingly looking for bundled, integrated solutions rather than piecemeal products. That is where Palo Alto believes it has an edge, with its “Platformization” approach that ties together firewalls, cloud security, and now identity tools through CyberArk.
Arora also warned that the rise of agent-driven AI attacks is making security windows shorter—down to just 25 minutes before attackers can cause damage. That, he said, makes a unified platform more valuable, as companies need defensive tools that work together instead of across fragmented systems.
Palo Alto Raises Guidance
The company guided higher for both the next quarter and the full Fiscal year, aiming to reach $10 billion in revenue in Fiscal 2026. If it hits that target, Palo Alto would become the first pure-play security company to cross that threshold.
For now, the strong results are helping ease fears that the CyberArk deal will weigh the stock down. Investors seem ready to give management more time to prove that its big bet on identity security is worth the price.
Is Palo Alto Stock a Buy or Sell?
Turning to TipRanks, Palo Alto Networks carries a “Strong Buy” rating based on 38 analyst reviews over the past three months. Out of those, 30 analysts recommend Buy, seven say Hold, and just 1 has issued a Sell rating.
The PANW stock’s average 12-month price target sits at $216.03, suggesting a potential upside of about 22.6% from the most recent close at $176.17.
This shows that Wall Street is leaning firmly bullish on Palo Alto’s prospects even as the CyberArk deal lingers in the background.
