Asia FX dithers as dollar steadies before Powell speech; yen muted after CPI data
Investing.com - Jefferies maintained its Buy rating on Palo Alto Networks (NASDAQ:PANW) with a price target of $235.00, citing strong free cash flow performance. The cybersecurity giant, currently valued at $117.5 billion, has demonstrated robust financial health with a 73.6% gross profit margin. According to InvestingPro analysis, while the stock appears overvalued at current levels, the company maintains strong cash flow metrics.
The cybersecurity company reported $955 million in free cash flow for the fourth quarter of fiscal year 2025, representing a 37.6% FCF margin that exceeded consensus expectations of 36.4%. Palo Alto Networks finished FY25 with an overall FCF margin of 38%. InvestingPro data reveals the company’s strong financial position, with sufficient cash flows to cover interest payments and a moderate debt level, supporting its robust FCF performance.
For fiscal year 2026, the company provided FCF margin guidance of 38-39%, compared to consensus estimates of 37.3%. Jefferies views this target as achievable based on current performance trends.
Palo Alto Networks noted that approximately 50% of its expected FY26 free cash flow will come from deferred payment deals signed in prior fiscal years, up from approximately 40% in FY25 and 30% in FY24. This implies $2.0 billion of new FCF in FY26 compared to $2.1 billion in FY25.
The research firm expressed confidence that Palo Alto Networks will reach $4.6 billion of FCF in FY27, based on increased visibility from a higher percentage of annual bookings and 24% year-over-year growth in remaining performance obligations in the fourth quarter.
In other recent news, Palo Alto Networks reported its fourth-quarter earnings for 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $0.95, compared to the forecast of $0.89. The company’s revenue aligned with expectations, reaching $2.5 billion. Additionally, the cybersecurity firm demonstrated strong performance in revenue, remaining performance obligations (RPO), and bookings metrics, bolstered by large multiyear deals. However, there was a slight concern regarding a lighter beat on next-generation security annual recurring revenue (NGS ARR). Raymond (NSE:RYMD) James has reiterated its Market Perform rating on Palo Alto Networks following these results. The firm noted the company’s accelerating revenue and robust bookings as positive indicators. These developments reflect Palo Alto Networks’ ongoing financial strength and market presence.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.