Raymond James reiterates Market Perform rating on Palo Alto Networks stock

Investing.com - Raymond (NSE:RYMD) James has reiterated its Market Perform rating on Palo Alto Networks (NASDAQ:PANW), a prominent player in the software industry with a market cap of $117.5 billion, following the company’s fiscal fourth-quarter results. According to InvestingPro analysis, the stock is currently trading above its Fair Value.

The cybersecurity firm reported accelerating revenue, RPO, and bookings metrics that exceeded expectations, driven by continued strength from large multiyear deals. With a robust revenue growth of 13.91% over the last twelve months and a healthy gross profit margin of 73.56%, the company continues to demonstrate strong operational performance. The only minor concern noted was a lighter beat on NGS ARR.

Palo Alto Networks’ forward guidance also surpassed growth and profitability expectations, though Raymond James anticipates these trajectories will change after the closing of the CyberArk acquisition next calendar year.

The firm highlighted that services are implied to be flat or decelerating in fiscal year 2026 as product growth accelerates. Raymond James views Palo Alto’s product line as having a larger software constitution compared to peers, making it a more attractive model for predictability.

Raymond James also noted that a new 40%+ adjusted free cash flow margin in fiscal year 2028 post-CyberArk acquisition could imply approximately $6 billion of FCF generation at modest growth rates, potentially offsetting some deal dilution.

In other recent news, Palo Alto Networks reported its fourth-quarter earnings for 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.95, exceeding the forecasted $0.89. Revenue for the quarter met expectations, totaling $2.5 billion. These results reflect a strong financial performance for the company. The earnings beat was well-received in the market. This development highlights the company’s ability to meet and exceed financial projections. Investors might find the alignment of revenue with expectations particularly noteworthy. Palo Alto Networks continues to demonstrate its financial resilience through these results.

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