BTIG analyst Gray Powell has maintained their neutral stance on PANW stock, giving a Hold rating today.
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Gray Powell has given his Hold rating due to a combination of factors. While Palo Alto Networks showed solid performance in its recent fiscal quarter, with slight revenue growth and notable progress in Next-Gen Security (NGS) Annual Recurring Revenue (ARR), there are still concerns. The company’s revenue guidance has been marginally increased, and there is positive momentum in large deals and product revenue trends. However, challenges persist, such as the year-over-year declines in NGS ARR net additions, which indicate that growth may be slowing faster than anticipated.
Despite encouraging contributions from software sales and strong growth in SASE and software firewall bookings, the underlying metrics such as billings and bookings remain subdued. Powell also notes that, although the company maintains a healthy free cash flow margin target, the aggressive assumptions needed to meet guidance limit the stock’s upside potential. Additionally, the current valuation of PANW compared to its peers suggests a balanced risk-reward scenario, justifying the Hold rating.
According to TipRanks, Powell is a 5-star analyst with an average return of 10.9% and a 57.42% success rate. Powell covers the Technology sector, focusing on stocks such as Palo Alto Networks, Zscaler, and Fortinet.
In another report released today, Bank of America Securities also reiterated a Hold rating on the stock with a $215.00 price target.