Truist Securities raises Palo Alto Networks stock price target to $220

Investing.com - Truist Securities has raised its price target on Palo Alto Networks (NASDAQ:PANW) to $220.00 from $205.00 while maintaining a Buy rating on the cybersecurity company’s stock. According to InvestingPro data, PANW is currently trading at elevated multiples, with a P/E ratio of 93.8x and an EV/EBITDA of 88x, reflecting the market’s high growth expectations for this prominent player in the software industry.

The price target increase follows Palo Alto Networks’ strong fourth-quarter fiscal 2025 results, which exceeded analyst expectations. The company reported revenue growth of 15.8% year-over-year, outpacing consensus estimates of 14.2%, driven by strong performance in SASE, XSIAM, and virtual firewalls. The company maintains robust financials with a gross profit margin of 73.6% and has generated $3 billion in levered free cash flow over the last twelve months.

Next-Generation Security Annual Recurring Revenue (NGS ARR) grew 32.2% compared to consensus expectations of 31.5%. Remaining Performance Obligation (RPO) showed robust growth of 24% year-over-year, significantly above the consensus estimate of 20%.

Palo Alto Networks also provided initial guidance for fiscal year 2026 that was better than feared across multiple metrics, including NGS ARR, revenue, RPO, operating margin, and free cash flow margin.

Truist Securities expressed increased confidence that Palo Alto Networks remains on track to achieve its long-term goal of $15 billion in ARR by fiscal year 2030, driven by tailwinds in SASE, XSIAM, artificial intelligence, and identity solutions.

In other recent news, Palo Alto Networks reported a robust fourth-quarter performance, with total revenue reaching $2.54 billion, marking a 16% increase from the previous year and surpassing consensus estimates. Product revenue showed significant growth, rising 19% year-over-year. Following these results, several analyst firms have adjusted their outlooks on the company. Rosenblatt raised its price target to $225, maintaining a Buy rating, while Scotiabank (TSX:BNS) increased its target to $228, keeping a Sector Outperform rating. RBC Capital reiterated its Outperform rating, citing strong financial results that exceeded expectations and impressive forward guidance for fiscal year 2026. Cantor Fitzgerald maintained its Overweight rating, highlighting Palo Alto Networks’ success in surpassing FactSet consensus expectations across various metrics. Additionally, BMO Capital raised its price target to $225, noting the company’s solid report and its fiscal year 2026 growth guidance for Next-Generation Security Annual Recurring Revenue. These developments underscore Palo Alto Networks’ continued momentum and strong market performance.

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