On Monday, Stifel has increased its price target for Palo Alto Networks (NASDAQ:PANW) shares to $360 from the previous target of $330, maintaining a Buy rating on the stock.
This adjustment comes ahead of the company's fourth fiscal quarter 2024 results, which are scheduled to be reported on August 19, 2024, after market close.
The price target revision follows discussions with four cybersecurity Value-Added Resellers (VARs)/System Integrators (SIs) to gauge the current demand for cybersecurity and to evaluate Palo Alto Networks' performance specifically. The feedback from these checks was largely positive, indicating a healthy demand environment for cybersecurity products and services.
Notably, half of the VARs reported results that exceeded expectations, while the other half faced unique challenges that led to missed expectations.
Palo Alto Networks had previously shown stronger results in the second fiscal quarter 2024 Cybersecurity VAR Survey. The upcoming guidance for fiscal year 2025 is also a point of interest for investors and analysts alike. Stifel anticipates a conservative outlook from the company due to several factors.
These include the company's intention to avoid repeating the previous year's issue when they had to walk back their guidance after an August earnings report, the current unpredictable economic environment, and the fact that corporate budgets for calendar year 2025 have not been finalized.
In addition, Stifel referenced Palo Alto Networks' previous comments from the second fiscal quarter 2024 regarding an expected 12-18 month headwind from the company's strategic shift towards a platform-based approach. This transition is part of the company's long-term strategy but may present short-term challenges.
Investors and market watchers will be paying close attention to the company's forthcoming earnings report and guidance to assess the company's performance and outlook in the evolving cybersecurity landscape.
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