Palo Alto Networks: Strong Financial Performance and Growth Metrics Justify Buy Rating

Palo Alto Networks (PANW – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Shrenik Kothari from Robert W. Baird maintained a Buy rating on the stock and has a $230.00 price target.

Shrenik Kothari has given his Buy rating due to a combination of factors, primarily focusing on Palo Alto Networks’ strong financial performance and growth metrics. The company reported a solid increase in its Next-Generation Security Annual Recurring Revenue (NGS ARR), which grew by 34% year-over-year, and its Remaining Performance Obligations (RPO) increased by approximately 19% year-over-year. These figures demonstrate robust demand and a strong customer base, which are crucial indicators of future revenue streams.
Additionally, Palo Alto Networks showed impressive performance in product revenue, surpassing consensus expectations by about 7 percentage points, which helped offset a slight miss in service revenue. The company also raised the lower end of its fiscal year 2025 revenue guidance, indicating confidence in its continued growth trajectory. Furthermore, the operating and adjusted free cash flow margins were both raised at the low end, reflecting improved operational efficiency. These positive developments, despite a minor decline in stock price due to softer service line performance, underpin Kothari’s optimistic outlook and Buy rating for the stock.

According to TipRanks, Kothari is a top 100 analyst with an average return of 27.8% and a 77.27% success rate. Kothari covers the Technology sector, focusing on stocks such as CyberArk Software, Tenable Holdings, and Check Point.

In another report released yesterday, Rosenblatt Securities also maintained a Buy rating on the stock with a $235.00 price target.