Cautious Hold Rating for Palo Alto Networks Amid Mixed Financial Signals and Valuation Concerns

BTIG analyst Gray Powell has maintained their neutral stance on PANW stock, giving a Hold rating today.

Gray Powell’s rating is based on a combination of factors related to Palo Alto Networks’ recent financial performance and market position. The company posted decent results for the third fiscal quarter of 2025, with revenue aligning with expectations and a slight increase in revenue outlook. However, the net new Annual Recurring Revenue (ARR) for Next-Generation Security (NGS) was slightly below the most optimistic scenario, and there was some confusion regarding the softness in subscription and support revenue.
While there were positive signs, such as strong growth in Prisma SASE and XSIAM, Powell noted that the street estimates for the fiscal year 2026 NGS ARR might be too aggressive. Additionally, the company’s valuation, trading at approximately 30.0 times the estimated enterprise value to free cash flow for calendar year 2026, suggests a balanced risk-reward scenario compared to its peers. These factors collectively led to the Hold rating, indicating a cautious outlook despite some encouraging developments.

In another report released today, Bank of America Securities also reiterated a Hold rating on the stock with a $215.00 price target.

PANW’s price has also changed dramatically for the past six months – from $392.890 to $194.480, which is a -50.50% drop .