Cybersecurity firm Palo Alto Networks (PANW) is in talks to buy Israeli rival CyberArk Software (CYBR) in a deal that could be worth more than $20 billion, according to the Wall Street Journal, which cited people familiar with the matter. Interestingly, the companies could finalize the acquisition as early as this week, the report said. As a result, shares of CyberArk are surging following the report, while Palo Alto Networks’ stock is falling.
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Unsurprisingly, both companies have declined to comment on the discussions. Reuters noted that CyberArk did not respond to its inquiries, while Palo Alto Networks also has yet to issue a statement. However, it is worth noting that the potential deal comes during an active period for cybersecurity acquisitions as corporations continue to increase their spending on security tools in order to defend against the growing number of digital threats.
This deal would also follow other large moves in the sector, such as Alphabet’s (GOOGL) announcement in March that it would acquire Israeli cybersecurity startup Wiz for about $32 billion. In addition, it comes just one week after Palo Alto was rumored to buy out SentinelOne (S). Indeed, the rising competition among companies that offer all-in-one cybersecurity platforms has made several firms appealing takeover targets for larger rivals and private equity investors.
Is PANW Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PANW stock based on 27 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average PANW price target of $216 per share implies 11.3% upside potential.
