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Palo Alto Networks, Inc. ((PANW - Free Report) ) shares have gained 23.4% in three months, outperforming the Zacks Security industry’s growth of 15.8%. The stock has outperformed its industry peers, including CyberArk ((CYBR - Free Report) ) and Zscaler ((ZS - Free Report) ) , while underperforming CrowdStrike ((CRWD - Free Report) ). In the past three months, shares of CyberArk, Zscaler and CrowdStrike have gained 22.4%, 19.4% and 28%, respectively.
The outperformance of Palo Alto Networks’ share price raises the question: Should investors buy, hold or sell PANW stock?
3 Month Price Return Performance
Image Source: Zacks Investment Research
Palo Alto Networks Gains From Positive Industry Tailwinds
Palo Alto Networks is well-positioned to capitalize on the growing demand for advanced cybersecurity solutions. According to Fortune Business Insights, the global cybersecurity market is projected to expand from $193.73 billion in 2024 to $562.77 billion by 2032, representing a massive addressable market. As cyber threats become more sophisticated, enterprises are increasingly prioritizing multi-layered security platforms, which directly contribute to PANW’s strengths.
The company’s continued innovation in AI, automation and cloud security reinforces its competitive lead. AI is increasingly embedded into Palo Alto Networks’ offerings, which is helping it win multi-product deals through platforms like Cortex XSIAM and Prisma AI-Ready Security (Prisma AIRS).
As enterprises race to adopt generative AI, the company sees new attack surfaces forming, both in how organizations build AI and in how employees use third-party AI tools. Prisma AIRS is meant to close those gaps, providing visibility, data loss prevention, and compliance safeguards. Prisma AIRS aims to protect AI models from build to deployment across hybrid and multi-cloud setups. Moreover, just weeks after launch, Prisma AIRS has already built an eight-figure sales pipeline.
On its fourth-quarter fiscal 2025 earnings call, management described Cortex XSIAM as the fastest-growing product in its history. Palo Alto Networks ended the fourth quarter with about 400 customers being deployed on XSIAM, with average annual recurring revenue (ARR) per customer of more than $1 million. Moreover, around 25% of these customers were Global 2000 companies, which signifies strong adoption among large enterprises. Palo Alto Networks also closed a large deal in the fourth quarter. A leading European bank signed a $60 million-plus deal, which included adopting XSIAM. The bank wanted to reduce security complexity and manage costs, and as a result, the customer now uses three Palo Alto Networks platforms.
Additionally, the pending acquisition of CyberArk would strengthen Palo Alto Networks’ foothold in a category where it currently lacks scale. PANW has already built out capabilities in endpoint and network security through its Cortex and Prisma platforms. However, identity-driven threat protection has remained a weaker link. By integrating CyberArk’s capabilities, Palo Alto Networks would be able to deliver a more comprehensive and unified platform that spans cloud, endpoint, network and identity protection.
Prisma Access Browser Aids PANW’s SASE Growth
Palo Alto Networks is seeing strong momentum in its Secure Access Service Edge (SASE) business, where much of that growth is coming from its Prisma Access Browser. In the fourth quarter of fiscal 2025, SASE Annual Recurring Revenue (ARR) rose 35% year over year, which the management stated to be more than twice the pace of the overall market. The Prisma Access Browser accounted for a big part of this momentum, with over three million licenses sold in the fourth quarter and total seat count doubling to more than six million on a sequential basis.
Prisma Access Browser is becoming a key layer of security as more work moves to the cloud and artificial intelligence (AI) tools in the workplace. The browser allows secure access to web and software-as-a-service apps, protecting users and data in real time, regardless of where employees are located. Palo Alto Networks believes the browser will become the new operating system for enterprise work in the AI era, serving as the main interface for applications and data.
Management also expects this trend to fuel long-term SASE demand. The company says browsers will soon be integral to every secure access stack, especially as AI-driven agents interact through web interfaces. Large customers are already deploying Prisma Access Browser at scale, such as a U.S. pharmaceutical firm that bought 80,000 seats in the fourth quarter.
As AI adoption accelerates, PANW’s early investment in browser security may give it a lasting lead in the next stage of network protection and help sustain its strong SASE growth. The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 total revenues is pegged at $10.42 billion, indicating a year-over-year increase of 17.5%.
Image Source: Zacks Investment Research
Key Technical Indicator Signals Bullish Trend for PANW
Palo Alto Networks shares are trading above their 50-day and 200-day moving averages, a bullish technical signal that indicates the potential for continued upward momentum for the stock.
Image Source: Zacks Investment Research
Valuation: PANW Trades Below Industry and Peers
Palo Alto Networks is currently trading at a low price-to-sales (P/S) multiple compared to the industry. PANW’s forward 12-month P/S ratio sits at 13.14X, lower than the industry’s forward 12-month P/S ratio of 13.45X.
PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
PANW stock also trades at a lower P/S multiple compared with other industry peers, including CyberArk, CrowdStrike and Zscaler. Currently, CyberArk, CrowdStrike and Zscaler have P/S multiples of 16.48X, 24.33X and 14.68X, respectively.
Conclusion: Buy PANW Stock Right Now
As businesses continue to prioritize AI-driven cybersecurity solutions, Palo Alto Networks’ leadership in threat prevention, response and recovery will only strengthen. Moreover, Palo Alto Networks’ reasonable valuation offers some downside protection, which makes PANW an attractive buy, particularly for investors seeking exposure to cybersecurity growth at a fair price.
Image: Bigstock
Palo Alto Networks Rises 23% in 3 Months: How to Play the Stock
Key Takeaways
Palo Alto Networks, Inc. ((PANW - Free Report) ) shares have gained 23.4% in three months, outperforming the Zacks Security industry’s growth of 15.8%. The stock has outperformed its industry peers, including CyberArk ((CYBR - Free Report) ) and Zscaler ((ZS - Free Report) ) , while underperforming CrowdStrike ((CRWD - Free Report) ). In the past three months, shares of CyberArk, Zscaler and CrowdStrike have gained 22.4%, 19.4% and 28%, respectively.
The outperformance of Palo Alto Networks’ share price raises the question: Should investors buy, hold or sell PANW stock?
3 Month Price Return Performance
Image Source: Zacks Investment Research
Palo Alto Networks Gains From Positive Industry Tailwinds
Palo Alto Networks is well-positioned to capitalize on the growing demand for advanced cybersecurity solutions. According to Fortune Business Insights, the global cybersecurity market is projected to expand from $193.73 billion in 2024 to $562.77 billion by 2032, representing a massive addressable market. As cyber threats become more sophisticated, enterprises are increasingly prioritizing multi-layered security platforms, which directly contribute to PANW’s strengths.
The company’s continued innovation in AI, automation and cloud security reinforces its competitive lead. AI is increasingly embedded into Palo Alto Networks’ offerings, which is helping it win multi-product deals through platforms like Cortex XSIAM and Prisma AI-Ready Security (Prisma AIRS).
As enterprises race to adopt generative AI, the company sees new attack surfaces forming, both in how organizations build AI and in how employees use third-party AI tools. Prisma AIRS is meant to close those gaps, providing visibility, data loss prevention, and compliance safeguards. Prisma AIRS aims to protect AI models from build to deployment across hybrid and multi-cloud setups. Moreover, just weeks after launch, Prisma AIRS has already built an eight-figure sales pipeline.
On its fourth-quarter fiscal 2025 earnings call, management described Cortex XSIAM as the fastest-growing product in its history. Palo Alto Networks ended the fourth quarter with about 400 customers being deployed on XSIAM, with average annual recurring revenue (ARR) per customer of more than $1 million. Moreover, around 25% of these customers were Global 2000 companies, which signifies strong adoption among large enterprises. Palo Alto Networks also closed a large deal in the fourth quarter. A leading European bank signed a $60 million-plus deal, which included adopting XSIAM. The bank wanted to reduce security complexity and manage costs, and as a result, the customer now uses three Palo Alto Networks platforms.
Additionally, the pending acquisition of CyberArk would strengthen Palo Alto Networks’ foothold in a category where it currently lacks scale. PANW has already built out capabilities in endpoint and network security through its Cortex and Prisma platforms. However, identity-driven threat protection has remained a weaker link. By integrating CyberArk’s capabilities, Palo Alto Networks would be able to deliver a more comprehensive and unified platform that spans cloud, endpoint, network and identity protection.
Prisma Access Browser Aids PANW’s SASE Growth
Palo Alto Networks is seeing strong momentum in its Secure Access Service Edge (SASE) business, where much of that growth is coming from its Prisma Access Browser. In the fourth quarter of fiscal 2025, SASE Annual Recurring Revenue (ARR) rose 35% year over year, which the management stated to be more than twice the pace of the overall market. The Prisma Access Browser accounted for a big part of this momentum, with over three million licenses sold in the fourth quarter and total seat count doubling to more than six million on a sequential basis.
Prisma Access Browser is becoming a key layer of security as more work moves to the cloud and artificial intelligence (AI) tools in the workplace. The browser allows secure access to web and software-as-a-service apps, protecting users and data in real time, regardless of where employees are located. Palo Alto Networks believes the browser will become the new operating system for enterprise work in the AI era, serving as the main interface for applications and data.
Management also expects this trend to fuel long-term SASE demand. The company says browsers will soon be integral to every secure access stack, especially as AI-driven agents interact through web interfaces. Large customers are already deploying Prisma Access Browser at scale, such as a U.S. pharmaceutical firm that bought 80,000 seats in the fourth quarter.
As AI adoption accelerates, PANW’s early investment in browser security may give it a lasting lead in the next stage of network protection and help sustain its strong SASE growth. The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 total revenues is pegged at $10.42 billion, indicating a year-over-year increase of 17.5%.
Image Source: Zacks Investment Research
Key Technical Indicator Signals Bullish Trend for PANW
Palo Alto Networks shares are trading above their 50-day and 200-day moving averages, a bullish technical signal that indicates the potential for continued upward momentum for the stock.
Image Source: Zacks Investment Research
Valuation: PANW Trades Below Industry and Peers
Palo Alto Networks is currently trading at a low price-to-sales (P/S) multiple compared to the industry. PANW’s forward 12-month P/S ratio sits at 13.14X, lower than the industry’s forward 12-month P/S ratio of 13.45X.
PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
PANW stock also trades at a lower P/S multiple compared with other industry peers, including CyberArk, CrowdStrike and Zscaler. Currently, CyberArk, CrowdStrike and Zscaler have P/S multiples of 16.48X, 24.33X and 14.68X, respectively.
Conclusion: Buy PANW Stock Right Now
As businesses continue to prioritize AI-driven cybersecurity solutions, Palo Alto Networks’ leadership in threat prevention, response and recovery will only strengthen. Moreover, Palo Alto Networks’ reasonable valuation offers some downside protection, which makes PANW an attractive buy, particularly for investors seeking exposure to cybersecurity growth at a fair price.
Currently, Palo Alto Networks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.