Palo Alto Networks (NASDAQ:PANW) Shares Up 1.1% – Should You Buy?

Palo Alto Networks, Inc. (NASDAQ:PANW) saw its shares increase by 1.1% on Friday. The stock reached a high of $183.53 before settling at $182.70. During mid-day trading, 755,407 shares were exchanged, which represents a significant drop of 71% from the average volume of 2,577,069 shares in a typical trading session. The previous closing price was $180.74.

Wall Street Analysts Weigh In

Palo Alto Networks has recently garnered attention from various research firms. Cantor Fitzgerald reiterated its "overweight" rating on the stock and set a target price of $222.50 on November 21st. Jefferies Financial Group raised their price target from $225.00 to $240.00, issuing a "buy" recommendation on December 19th. Meanwhile, BMO Capital Markets increased its target price from $195.00 to $212.50 and labeled the stock as "outperform" in a note dated November 21st. Scotiabank lowered its price target from $400.00 to $200.00 while maintaining a "sector outperform" rating, reported last Friday. Lastly, Susquehanna raised their target from $210.00 to $217.50 and assigned a "positive" rating as of November 21st. Among analysts, two have a sell rating, ten have a hold rating, thirty-one support a buy rating, and one gives a strong buy rating. According to MarketBeat.com, Palo Alto Networks holds a consensus rating of "Moderate Buy" with an average target price of $201.46.

Palo Alto Networks Stock Performance

The company boasts a market capitalization of $120.25 billion, with a price-to-earnings ratio of 23.86 and a price-to-earnings-growth ratio of 5.75, along with a beta of 1.14. Currently, the fifty-day moving average stands at $191.81, while the two-hundred-day moving average is at $177.89.

Palo Alto Networks most recently reported its quarterly earnings on November 20th. The company achieved earnings per share of $0.78, surpassing the analysts' consensus estimate of $0.74 by $0.04. The return on equity was reported at 23.36%, with a net margin of 32.99%. The total revenue for the quarter was $2.14 billion, slightly exceeding the expected $2.12 billion. Comparatively, the same quarter the previous year showed earnings per share of $0.32, illustrating a revenue increase of 13.9% year-over-year. Analysts anticipate that Palo Alto Networks will report an EPS of 3.49 for the current fiscal year.

Insider Transactions

Additional details reveal that Nir Zuk, Executive Vice President, sold 336,000 shares of the company on November 25th at an average price of $193.70, amounting to a total of $65,081,520.00. Following this transaction, Zuk retained ownership of 3,643,516 shares valued at approximately $705,730,831.62, reflecting an 8.44% decrease in his holdings. The sale was officially documented with the SEC. Likewise, CEO Nikesh Arora sold 163,172 shares on October 10th at an average price of $184.00, totaling $30,022,832.14. Post-sale, he holds 1,237,430 shares valued at around $227,680,932.85, indicating an 11.65% reduction in his holdings. Corporate insiders hold about 2.50% of the company's shares.

Hedge Fund Engagement

Several institutional investors and hedge funds have recently adjusted their investments in Palo Alto Networks. Mainstream Capital Management LLC started a new position in the third quarter, worth approximately $1,156,000. Alpha Cubed Investments LLC increased their stake by 16.4% during the same quarter, owning 231,566 shares valued at $79,149,000 after adding 32,626 additional shares. Harvest Portfolios Group Inc. also acquired a new position in the third quarter worth around $24,414,000. Handelsbanken Fonder AB raised its stake in Palo Alto Networks by 3.8%, now owning 196,700 shares valued at $67,232,000 after adding 7,291 shares. Finally, Jennison Associates LLC expanded its holdings by 50.1%, owning 3,147,215 shares valued at $1,075,718,000 after purchasing an additional 1,050,173 shares in the last quarter. Currently, around 79.82% of the stock is owned by institutional investors and hedge funds.

About Palo Alto Networks

Palo Alto Networks, Inc. is a leading provider of cybersecurity solutions globally. They offer firewall appliances and software, along with Panorama, a security management solution for controlling network security platforms either as virtual or physical appliances. Their range of services includes threat prevention, malware protection, URL filtering, mobile device security, DNS security, and data loss prevention, among others.

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