Stifel maintains Buy on Palo Alto Networks stock, $225 target

On Wednesday, Stifel analysts maintained their Buy rating and $225.00 price target on Palo Alto Networks (NASDAQ:PANW) stock. According to InvestingPro data, the company, currently valued at $126.45 billion, is trading near its 52-week high of $207.24, suggesting strong market confidence. InvestingPro’s analysis indicates the stock is currently overvalued relative to its Fair Value. The cybersecurity company is scheduled to report its fiscal second quarter 2025 results on Thursday, February 13th, with an earnings call set for 4:30 PM ET. With a robust gross profit margin of 74.17% and revenue growth of 15% over the last twelve months, InvestingPro shows Palo Alto Networks maintains strong financial health, scoring "GREAT" on their comprehensive analysis framework.

The positive stance from Stifel comes after consultations with several cybersecurity value-added resellers (VARs) and system integrators (SIs), providing insights into the cyber demand trends and Palo Alto Networks’ performance in its January quarter. Feedback from these discussions suggested a healthy demand environment for cybersecurity, with one VAR’s results exceeding expectations and two others meeting them. This follows on from Palo Alto Networks’ strong performance indicated in Stifel’s fourth-quarter 2024 Cybersecurity VAR Survey.

The analysts noted that, alongside the favorable outcomes from VAR checks, robust financial reports from other industry players such as Fortinet (NASDAQ:FTNT) and Check Point also suggest the potential for an upside in Palo Alto Networks’ upcoming earnings. As for forward-looking guidance, Stifel anticipates that the company will raise its full-year 2025 next-generation security (NGS) annual recurring revenue (ARR) and revenue guidance to at least match any earnings beat. Additionally, they expect that the full-year 2025 remaining performance obligations (RPO) guidance, which was recently reaffirmed during the first quarter 2025 earnings, may need to be increased to drive the stock price upward post-earnings announcement.

In other recent news, Palo Alto Networks has been the focus of several analyst firms. Cantor Fitzgerald reaffirmed an Overweight rating, maintaining its price target at $223. The firm’s analyst anticipates growth in Next-Generation Security Annual Recurring Revenue for the second quarter of 2025 and expects the company to confirm its Free Cash Flow guidance of 37-38% for fiscal year 2025.

Simultaneously, JPMorgan reiterated its Overweight rating and a $224.50 price target, citing active deal engagements and robust performance across the company’s platform. Rosenblatt Securities raised its price target to $235, anticipating a robust second quarter for the fiscal year 2025, driven by several factors including a firewall refresh cycle and successful adoption of Cortex/XSIAM.

Wedbush Securities adjusted its price target for Palo Alto Networks, reducing it from $400 to $225, while retaining an Outperform rating, citing increasing momentum in the company’s cybersecurity platform strategy. Lastly, KeyBanc Capital Markets increased the price target to $240, following positive feedback from the company’s partners and an encouraging fiscal second-quarter setup.

These are recent developments that highlight the attention Palo Alto Networks is receiving from analysts, emphasizing the company’s potential for revenue growth and strong financial performance.

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