Palo Alto Networks
Palo Alto Networks
PANW
$5.80
2.45%
61%
IBD Stock Analysis
- Stock seesawing around 50-day with buy point of 258.88
- Aggressive investors have early entry available at 238.34
- Shares now have best-possible Composite Rating of 99
Industry Group Ranking
Emerging Pattern
Consolidation
* Not real-time data. All data shown was captured at
2:17PM EDT on
10/03/2023.
Palo Alto Networks (PANW) is the IBD Stock Of The Day as the cybersecurity firm shows strength after posting better-than-expected earnings in its recent quarterly report. PANW stock is hovering below a buy point.
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On Aug. 18, the Santa Clara, Calif.-based company reported adjusted earnings of $1.44 a share for its fiscal fourth quarter ended July 31. Earnings per share jumped 80% year over year and topped Wall Street’s target of $1.29 per share.
Meanwhile, Palo Alto Networks’ sales climbed 26% to $1.95 billion in the period. That was just below the Street’s consensus estimate of $1.96 billion.
“Our strategy is resonating with a growing number of our customers, driving continued consolidation, to deliver superior security outcomes,” Chief Executive Nikesh Arora said in a news release.
He added, “We were delighted with the reception in the market for our AI-based security automation platform, XSIAM.”
PANW Stock Is In Consolidation
PANW stock surged 15% in its first trading session after the earnings report.
Since then, Palo Alto Networks has seesawed around its 50-day moving average line. PANW stock has been consolidating for the past 14 weeks around a buy point of 258.88, according to IBD MarketSmith charts.
In afternoon trading on the stock market today, PANW stock slid 2.5% to 230.97.
Aggressive investors could use a bounce off its 50-day line as an early entry point, if PANW stock tops Friday’s high of 238.34. But with the stock market in correction, investors should also be cautious.
In a recent note to clients, Morgan Stanley analyst Hamza Fodderwala reiterated his overweight, or buy, rating on PANW stock with a price target of 304. He favors Palo Alto for its exposure to the public-sector security market.
“The public sector has been notably strong this year, followed by health care and pharma,” he said.
Also, Palo Alto is benefiting from customer demand for vendor consolidation of cybersecurity tools.
“With the average enterprise deploying over 50 different security tools, the demand for vendor consolidation remains high and PANW is a leading beneficiary given its broad platform,” Fodderwala said.
Palo Alto Networks On 3 IBD Stock Lists
Palo Alto Networks is tied for first place in IBD’s Computer Software-Security industry group, according to IBD Stock Checkup. PANW stock has a best-possible IBD Composite Rating of 99, matching peers CrowdStrike (CRWD) and Zscaler (ZS).
IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Also, IBD’s security software group ranks No. 41 out of 197 industry groups that IBD tracks. IBD trading guidelines recommend focusing on top-rated stocks in leading industry groups.
Further, PANW stock is on three IBD stock lists: IBD 50, Big Cap 20 and Tech Leaders.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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