Palo Alto's (PANW 1.02%) unique approach to customer acquisition is showing promising early results.
Over the past year, many growth stocks retreated from their all-time highs amid concerns of unpredictable tariffs and elevated interest rates. Many of those investors flocked back toward conservative blue chip stocks and other safe haven investments.
Recently, Zacks.com users have been paying close attention to Palo Alto (PANW). This makes it worthwhile to examine what the stock has in store.
Palo Alto Networks, Inc. (NASDAQ:PANW ) Morgan Stanley Technology, Media & Telecom Conference March 5, 2025 6:20 PM ET Company Participants Nikesh Arora - CEO Conference Call Participants Keith Weiss - Morgan Stanley Keith Weiss Excellent. Thank you, everyone, for joining us.
Palo Alto (PANW) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
AI-driven security offerings, platform consolidation, Big Money have shares of cybersecurity leader Palo Alto Networks, Inc. (PANW) rising.
Palo Alto Networks (PANW -3.91%) has a ton going for it right now. It enacted a 2-for-1 stock split in December and recently notched a new all-time high after reporting strong Q2 FY 2025 (ending Jan. 31) results.
Palo Alto Networks (PANW -3.91%) released its fiscal 2025 second-quarter results (for the three months ended Jan. 31, 2025) on Feb. 13. Investors' initial reaction to the report was a negative one as the company's earnings outlook fell below expectations.
PANW's platformization strategy has delivered the new growth opportunity as intended, thanks to the free extended rollout period. These have already been accretive to its top/ bottom-lines and multi-year remaining performance obligations, providing great insights to its long-term prospects. Combined with the generative AI boom, multi-year cloud super cycle, and the growing enterprise need for cybersecurity offerings, we can understand the stocks' recent outperformance.
Palo Alto Networks' growth has reaccelerated in recent quarters, supported by improved hardware demand and continued strength from its next-gen portfolio. While growth is likely to improve again in the third quarter, I expect Palo Alto's growth to stabilize in the mid-teens. This growth must also be viewed in light of Palo Alto's platformization strategy and heavy use of incentives to create growth, which is impacting the company's profitability and cash flows.
Palo Alto Networks' (PANW -3.91%) 2025 has started out better than its 2024, when the stock plunged following its fiscal second-quarter 2024 results. A year ago, the company commenced its new "platformization" strategy to move customers to one of its three cybersecurity platforms and away from point solutions.
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