We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Prisma AIRS Becoming Palo Alto Networks' Fastest Growth Engine?
Read MoreHide Full Article
Key Takeaways
PANW grew Prisma AIRS customers to more than 300 in Q3 FY26, triple the prior quarter level.
Palo Alto Networks signed a Prisma AIRS contract worth more than $20M with a global consulting firm.
PANW expects Prisma AIRS to reach $100M in annual recurring revenues within the next few quarters.
Palo Alto Networks (PANW - Free Report) is seeing strong demand for Prisma AIRS, its AI security platform. Prisma AIRS is designed to secure AI models and AI-powered applications across their lifecycle, including model scanning, red teaming and runtime protection. Management noted that enterprises are moving beyond AI experimentation and beginning to use AI in real workflows. As that happens, security becomes more important, and PANW is positioning AIRS to secure AI from development all the way through production.
Prisma AIRS' customer base tripled on a sequential basis. Prisma AIRS ended the third quarter of fiscal 2026 with more than 300 customers, up from 100 customers at the end of the second quarter. This robust growth was made possible on the back of PANW expanding the platform's capabilities over the past year. Prisma AIRS now includes AI runtime security, model security, identity security, observability and agentic endpoint protection. These additions allow customers to use a single platform to secure different parts of their AI environments.
The platform is also beginning to generate larger deals. During the third quarter, a global consulting company signed a contract worth more than $20 million to use Prisma AIRS for securing its AI applications and agents. The customer processes more than 2 trillion tokens per month on the platform. Management stated that this was the largest Prisma AIRS deal signed so far, showing that enterprise customers are increasing spending on AI security.
Further, PANW expects Prisma AIRS to reach $100 million in annual recurring revenues within the next couple of quarters despite being in the market for less than a year. The above-mentioned factors show how Prisma AIRS is becoming an important contributor to the company's future revenue growth on the back of rapid customer growth, expanding capabilities and growing enterprise adoption. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year increase of around 23.7% and 20.2%, respectively.
How Competitors Fare Against PANW
Competitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.
CrowdStrike ended its first quarter of fiscal 2027 with $5.51 billion in ARR, reflecting 24% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.
Though comparatively a small competitor, SentinelOne posted first-quarter fiscal 2027 year-over-year growth of 23% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
PANW’s Price Performance, Valuation & Estimates
Shares of Palo Alto Networks have jumped 41% in the year-to-date period compared with the Zacks Security industry’s return of 37.2%.
PANW’s YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 15.87X compared with the industry’s average of 15.09X. The Zacks Value Score of F also suggests that PANW stock is overvalued.
PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 11.4% and 7.5%, respectively. The estimate for fiscal 2026 has been revised up by a penny over the past seven days, while the same for fiscal 2027 has been revised downward by a penny over the past seven days.
View the Zacks #1 Rank List
Image: Bigstock
Is Prisma AIRS Becoming Palo Alto Networks' Fastest Growth Engine?
Key Takeaways
Palo Alto Networks (PANW - Free Report) is seeing strong demand for Prisma AIRS, its AI security platform. Prisma AIRS is designed to secure AI models and AI-powered applications across their lifecycle, including model scanning, red teaming and runtime protection. Management noted that enterprises are moving beyond AI experimentation and beginning to use AI in real workflows. As that happens, security becomes more important, and PANW is positioning AIRS to secure AI from development all the way through production.
Prisma AIRS' customer base tripled on a sequential basis. Prisma AIRS ended the third quarter of fiscal 2026 with more than 300 customers, up from 100 customers at the end of the second quarter. This robust growth was made possible on the back of PANW expanding the platform's capabilities over the past year. Prisma AIRS now includes AI runtime security, model security, identity security, observability and agentic endpoint protection. These additions allow customers to use a single platform to secure different parts of their AI environments.
The platform is also beginning to generate larger deals. During the third quarter, a global consulting company signed a contract worth more than $20 million to use Prisma AIRS for securing its AI applications and agents. The customer processes more than 2 trillion tokens per month on the platform. Management stated that this was the largest Prisma AIRS deal signed so far, showing that enterprise customers are increasing spending on AI security.
Further, PANW expects Prisma AIRS to reach $100 million in annual recurring revenues within the next couple of quarters despite being in the market for less than a year. The above-mentioned factors show how Prisma AIRS is becoming an important contributor to the company's future revenue growth on the back of rapid customer growth, expanding capabilities and growing enterprise adoption. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year increase of around 23.7% and 20.2%, respectively.
How Competitors Fare Against PANW
Competitors like CrowdStrike (CRWD - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.
CrowdStrike ended its first quarter of fiscal 2027 with $5.51 billion in ARR, reflecting 24% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.
Though comparatively a small competitor, SentinelOne posted first-quarter fiscal 2027 year-over-year growth of 23% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
PANW’s Price Performance, Valuation & Estimates
Shares of Palo Alto Networks have jumped 41% in the year-to-date period compared with the Zacks Security industry’s return of 37.2%.
PANW’s YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 15.87X compared with the industry’s average of 15.09X. The Zacks Value Score of F also suggests that PANW stock is overvalued.
PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 11.4% and 7.5%, respectively. The estimate for fiscal 2026 has been revised up by a penny over the past seven days, while the same for fiscal 2027 has been revised downward by a penny over the past seven days.
Image Source: Zacks Investment Research
Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.