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On Monday, UBS analysts reiterated a Neutral rating for Palo Alto Networks (NASDAQ:PANW) stock, maintaining a price target of $200.00. The decision follows a review of the company’s third-quarter results and subsequent discussions with the investor relations team. According to InvestingPro data, the company currently trades at $193.26, with analyst targets ranging from $123 to $235. The stock has shown strong momentum, delivering a 30% return over the past year.
The analysts noted some concerns about the potential for accelerated growth in subscription and support revenues. The current market model anticipates 16% growth for FY26, compared to 15% in the third quarter of 2025 and 14% expected in the fourth quarter of 2025. Recent data from InvestingPro shows the company maintaining a robust revenue growth of 13.91% in the last twelve months, with a healthy gross profit margin of 73.56%.
Despite these reservations, the discussions with Palo Alto Networks were described as generally positive. The company expressed confidence in its growth and free cash flow, citing a more stable demand environment as of May.
The analysts highlighted that the key issues moving forward will likely be the revenue increase for FY26 and the stability of free cash flow. While the growth in Net New Annual Recurring Revenue (NNARR) accelerated in the third quarter, UBS analysts believe that achieving the street’s forecast of 25% year-over-year growth could be challenging.
In other recent news, Palo Alto Networks has reported its fiscal third-quarter earnings, showing a 15% year-over-year increase in revenue, which slightly surpassed consensus expectations. The company’s Remaining Performance Obligations (RPO) rose by 19% year-over-year, while the next-generation security annual recurring revenue (NGS ARR) increased by 34%. Analysts from FBN Securities noted that although these key metrics beat expectations, the magnitude of the beats was less impressive compared to previous quarters. DA Davidson highlighted that while RPO was at the low end of the guidance range, Annual Recurring Revenue (ARR) exceeded expectations.
Scotiabank (TSX:BNS) maintained a Sector Outperform rating, emphasizing the company’s strong product revenue growth and positive outlook for its fiscal years 2026 and 2027 targets. BNP Paribas (OTC:BNPQY) Exane also reiterated an Outperform rating, acknowledging the company’s platformization efforts and successful displacement of competitors in the Security Information and Event Management (SIEM) space. Susquehanna kept a Positive rating, citing Palo Alto Networks’ resilience and strategic focus on platformization as reasons for its confidence in the company’s future. These developments reflect analysts’ continued confidence in Palo Alto Networks’ strategic direction and its ability to navigate market uncertainties.
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