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Can Palo Alto Networks' XSIAM Sustain Its Strong Growth Momentum?
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Key Takeaways
Palo Alto Networks grew XSIAM ARR to more than $600M, up 100% year over year in Q3 fiscal 2026.
PANW ended Q3 fiscal 2026 with more than 740 XSIAM customers amid strong adoption.
XSIAM processes more than 17 petabytes daily, helping most customers respond to threats in under 10 minutes.
Palo Alto Networks (PANW - Free Report) is seeing strong growth in XSIAM, its security operations platform. In the third quarter of fiscal 2026, XSIAM annual recurring revenue (ARR) exceeded $600 million, up 100% from the year-ago quarter. PANW's XSIAM had more than 740 customers at the end of the third quarter. XSIAM is becoming an important part of Palo Alto Networks’ business as companies look for better ways to detect, investigate and respond to cyber threats.
The company believes artificial intelligence is changing the threat landscape. According to management, attackers can now use advanced AI models to find vulnerabilities and launch attacks much faster than before. Earlier in 2026, PANW's Unit 42 team demonstrated a ransomware attack that moved from initial access to data theft in only 25 minutes. At the same time, many organizations still take days to identify a security breach. This gap is increasing demand for automated security operations platforms such as XSIAM.
XSIAM processes more than 17 petabytes of telemetry data every day and helps customers manage large volumes of security data and automate threat response. As a result, most XSIAM customers are now able to respond to threats in less than 10 minutes. This gives XSIAM a significant edge over traditional security operations tools that often require more manual work and longer investigation times.
PANW is also benefiting from its broader platform strategy. XSIAM works with the company's network security, AI security, identity security and observability products. This allows customers to manage more of their security operations through a single platform. With XSIAM ARR growing 100%, strong customer adoption and rising demand for automated security operations, XSIAM is becoming one of Palo Alto Networks' fastest-growing businesses and an important contributor to future growth.
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 53.3% in the year-to-date period compared with the Zacks Security industry’s return of 44.3%.
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 17.25X compared with the industry’s average of 15.77X. 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 12.9% and 8.1%, respectively. The estimates for fiscal 2026 and 2027 have been revised up by 6 cents and 8 cents, respectively, over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Can Palo Alto Networks' XSIAM Sustain Its Strong Growth Momentum?
Key Takeaways
Palo Alto Networks (PANW - Free Report) is seeing strong growth in XSIAM, its security operations platform. In the third quarter of fiscal 2026, XSIAM annual recurring revenue (ARR) exceeded $600 million, up 100% from the year-ago quarter. PANW's XSIAM had more than 740 customers at the end of the third quarter. XSIAM is becoming an important part of Palo Alto Networks’ business as companies look for better ways to detect, investigate and respond to cyber threats.
The company believes artificial intelligence is changing the threat landscape. According to management, attackers can now use advanced AI models to find vulnerabilities and launch attacks much faster than before. Earlier in 2026, PANW's Unit 42 team demonstrated a ransomware attack that moved from initial access to data theft in only 25 minutes. At the same time, many organizations still take days to identify a security breach. This gap is increasing demand for automated security operations platforms such as XSIAM.
XSIAM processes more than 17 petabytes of telemetry data every day and helps customers manage large volumes of security data and automate threat response. As a result, most XSIAM customers are now able to respond to threats in less than 10 minutes. This gives XSIAM a significant edge over traditional security operations tools that often require more manual work and longer investigation times.
PANW is also benefiting from its broader platform strategy. XSIAM works with the company's network security, AI security, identity security and observability products. This allows customers to manage more of their security operations through a single platform. With XSIAM ARR growing 100%, strong customer adoption and rising demand for automated security operations, XSIAM is becoming one of Palo Alto Networks' fastest-growing businesses and an important contributor to future growth.
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 53.3% in the year-to-date period compared with the Zacks Security industry’s return of 44.3%.
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 17.25X compared with the industry’s average of 15.77X. 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 12.9% and 8.1%, respectively. The estimates for fiscal 2026 and 2027 have been revised up by 6 cents and 8 cents, respectively, over the past 30 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.