Stock market today: S&P 500 drops for fifth day as focus shifts to Powell’s speech
Investing.com - Palo Alto Networks (NASDAQ:PANW), a prominent player in the cybersecurity industry with a market capitalization of $117.5 billion, reported solid fiscal fourth-quarter 2025 results with an initial fiscal year 2026 outlook that exceeded market expectations, according to BTIG. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, supported by strong cash flows and moderate debt levels.
BTIG maintained its Neutral rating on the cybersecurity company, noting that Palo Alto Networks achieved fourth-quarter Next-Generation Security Annual Recurring Revenue (NGS ARR) of $5,580 million, representing 32% year-over-year growth with $490 million in net additions. This performance slightly exceeded BTIG’s estimate of $5,550 million and the Street consensus of $5,551 million. The company’s revenue growth remains robust at 13.9% year-over-year, with trailing twelve-month revenue reaching $8.87 billion. For deeper insights into PANW’s growth metrics and 12+ additional ProTips, consider accessing the comprehensive analysis available on InvestingPro.
The company’s fiscal 2026 revenue guidance reached a midpoint of $10,500 million, projecting 13.9% year-over-year growth, which surpassed prior Street estimates of $10,423 million and buy-side expectations in the 12-13% range. Palo Alto Networks also forecasted NGS ARR growth of 26% year-over-year for fiscal 2026, above Street expectations of 25%.
BTIG expressed encouragement regarding the company’s mix shift to software solutions including SASE, virtual firewall, and SD-WAN in its network security business. The firm also highlighted that disclosures on Cortex XSIAM demonstrate the product has reached scale and is growing rapidly in the SIEM market.
Despite these positive indicators, BTIG identified concerns including an aggressive initial fiscal 2026 NGS ARR guidance compared to previous years and limited disclosure about the contribution from the $700 million Protect AI acquisition, which BTIG estimates added $15-20 million to results. Current InvestingPro analysis indicates the stock is trading above its Fair Value, with elevated multiples including a P/E ratio of 93.8x and an EV/EBITDA of 88x. With Palo Alto Networks trading at 26.0x 2027 estimated EV/FCF versus peers at approximately 22.5x, BTIG sees limited upside potential.
In other recent news, Palo Alto Networks reported its fourth-quarter fiscal 2025 results, showcasing strong financial performance. The company achieved non-GAAP earnings per share of $0.95, surpassing the consensus estimate of $0.88, and reported revenue of $2.54 billion, exceeding the expected $2.50 billion and marking a 15% year-over-year increase. Analysts from Citizens JMP reiterated a Market Outperform rating with a price target of $212.00 following these results. Jefferies also maintained a Buy rating with a $235.00 target, highlighting the company’s robust free cash flow performance of $955 million, which represented a 37.6% margin that exceeded expectations. Raymond (NSE:RYMD) James continued to rate Palo Alto Networks at Market Perform, noting strong revenue, RPO, and bookings metrics driven by large multiyear deals, despite a lighter beat on NGS ARR. Overall, the company’s financial performance in the fourth quarter has been well-received by analysts and investors alike.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.