PANW Should I Buy
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Palo Alto Networks (PANW) is not a strong buy at this moment for a beginner investor with a long-term strategy. While the company shows potential in the cybersecurity space, recent financial performance indicates slowing growth, and technical indicators suggest a bearish trend. The stock's pre-market price is slightly down, and there are concerns about the integration of its recent acquisitions. For a long-term investor, it may be better to wait for clearer signs of recovery or stabilization before entering.
The technical indicators for PANW suggest a bearish trend. The MACD is below zero and negatively contracting, while the RSI is neutral at 35.578, not indicating oversold or overbought conditions. The moving averages are bearish (SMA_200 > SMA_20 > SMA_5), and the stock is trading below the key pivot level of 165.239, with support at 155.158 and resistance at 175.32.
Hedge funds have significantly increased their buying activity, up 185.66% over the last quarter.
Congress members have made 4 purchase transactions in the last 90 days, indicating positive sentiment.
The acquisition of CyberArk is expected to enhance identity security capabilities in the AI era.
Concerns about the integration of recent acquisitions, including the $25 billion CyberArk deal.
Revenue growth has decelerated to 15.67% YoY in Q1 FY2026, down from 25% in
Net income and EPS have declined YoY, reflecting potential profitability challenges.
Analysts have lowered price targets ahead of earnings, citing market competition and lower peer multiples.
In Q1 FY2026, Palo Alto Networks reported revenue growth of 15.67% YoY to $2.47 billion. However, net income dropped by 4.76% YoY to $334 million, and EPS decreased by 4.08% YoY to $0.47. Gross margin slightly improved to 74.21%, up 0.16% YoY. These results indicate slowing growth and profitability challenges.
Analysts maintain a generally positive outlook with Buy and Outperform ratings, but many have lowered their price targets recently. RBC, DA Davidson, Stifel, and Barclays have all reduced their targets, citing market competition, lower peer multiples, and acquisition-related risks. Piper Sandler and Morgan Stanley remain optimistic about long-term growth potential in the cybersecurity sector.
