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.
PANW to Buy Embrace: Will it Strengthen the Observability Platform?
Read MoreHide Full Article
Key Takeaways
Palo Alto Networks is adding Embrace's RUM technology and launching Synthetics for observability.
PANW's Observability platform has surpassed $300 million in annual recurring revenues.
New capabilities will integrate with Cortex AgentiX to automate remediation and expand platform adoption.
Palo Alto Networks (PANW - Free Report) is expanding its Observability platform with the acquisition of Embrace, a provider of Real User Monitoring (RUM), and the launch of Synthetics, a new monitoring solution developed by its Autonomous Digital Experience Management team. These additions are expected to expand Palo Alto Networks' observability capabilities from infrastructure and application monitoring to Digital Experience Monitoring.
Embrace's RUM technology helps organizations understand how applications perform from the user's perspective by tracking actual user interactions, while Synthetics continuously tests applications from different locations to identify performance issues before they affect users. Palo Alto Networks said combining these capabilities with its existing observability platform will allow customers to monitor user experience, application performance and backend infrastructure through a single platform.
The acquisition builds on Palo Alto Networks' growing observability business. Following the Chronosphere acquisition earlier this year, Palo Alto Networks' Observability platform has surpassed $300 million in annual recurring revenues in the third quarter of fiscal 2026. As AI applications and modern software environments become more complex, PANW's observability platform remains well poised to witness further growth on the back of rising demand for unified observability solutions that provide complete visibility across applications and infrastructure.
The Embrace acquisition also supports Palo Alto Networks' broader platform strategy. Management said the new capabilities will integrate with Cortex AgentiX, allowing organizations not only to identify performance issues but also to automate remediation. As enterprises continue to modernize applications and deploy AI workloads, expanding its observability platform could help Palo Alto Networks increase customer adoption and create additional cross-selling opportunities across its broader security portfolio.
How Competitors Fare Against PANW
Competitors like CrowdStrike (CRWD - Free Report) and Zscaler (ZS - Free Report) are also gaining ground through platform expansion and AI innovation through acquisitions.
CrowdStrike is strengthening its Falcon platform by acquiring the intellectual property of XM Cyber. The deal includes more than 45 patents and proprietary source code related to attack path analysis and exposure management. Adding XM Cyber's attack path analysis technology should help improve the Falcon platform's ability to identify attack paths and prioritize security risks, and help organizations understand how attackers can move through their networks by combining multiple vulnerabilities.
In May 2026, Zscaler announced its intent to acquire Symmetry Systems, which provides an access graph that maps how identities, applications and data sources connect across the enterprise. Through this acquisition, Symmetry Systems’ technology will be integrated with Zscaler’s Zero Trust Exchange platform to strengthen agentic security use cases, providing organizations with control over how AI agents interact with applications and data.
PANW’s Price Performance, Valuation & Estimates
Shares of Palo Alto Networks have jumped 85.7% in the year-to-date period compared with the Zacks Security industry’s return of 70%.
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 20.40X compared with the industry’s average of 18.93X. 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 60 days.
View the Zacks #1 Rank List
Image: Bigstock
PANW to Buy Embrace: Will it Strengthen the Observability Platform?
Key Takeaways
Palo Alto Networks (PANW - Free Report) is expanding its Observability platform with the acquisition of Embrace, a provider of Real User Monitoring (RUM), and the launch of Synthetics, a new monitoring solution developed by its Autonomous Digital Experience Management team. These additions are expected to expand Palo Alto Networks' observability capabilities from infrastructure and application monitoring to Digital Experience Monitoring.
Embrace's RUM technology helps organizations understand how applications perform from the user's perspective by tracking actual user interactions, while Synthetics continuously tests applications from different locations to identify performance issues before they affect users. Palo Alto Networks said combining these capabilities with its existing observability platform will allow customers to monitor user experience, application performance and backend infrastructure through a single platform.
The acquisition builds on Palo Alto Networks' growing observability business. Following the Chronosphere acquisition earlier this year, Palo Alto Networks' Observability platform has surpassed $300 million in annual recurring revenues in the third quarter of fiscal 2026. As AI applications and modern software environments become more complex, PANW's observability platform remains well poised to witness further growth on the back of rising demand for unified observability solutions that provide complete visibility across applications and infrastructure.
The Embrace acquisition also supports Palo Alto Networks' broader platform strategy. Management said the new capabilities will integrate with Cortex AgentiX, allowing organizations not only to identify performance issues but also to automate remediation. As enterprises continue to modernize applications and deploy AI workloads, expanding its observability platform could help Palo Alto Networks increase customer adoption and create additional cross-selling opportunities across its broader security portfolio.
How Competitors Fare Against PANW
Competitors like CrowdStrike (CRWD - Free Report) and Zscaler (ZS - Free Report) are also gaining ground through platform expansion and AI innovation through acquisitions.
CrowdStrike is strengthening its Falcon platform by acquiring the intellectual property of XM Cyber. The deal includes more than 45 patents and proprietary source code related to attack path analysis and exposure management. Adding XM Cyber's attack path analysis technology should help improve the Falcon platform's ability to identify attack paths and prioritize security risks, and help organizations understand how attackers can move through their networks by combining multiple vulnerabilities.
In May 2026, Zscaler announced its intent to acquire Symmetry Systems, which provides an access graph that maps how identities, applications and data sources connect across the enterprise. Through this acquisition, Symmetry Systems’ technology will be integrated with Zscaler’s Zero Trust Exchange platform to strengthen agentic security use cases, providing organizations with control over how AI agents interact with applications and data.
PANW’s Price Performance, Valuation & Estimates
Shares of Palo Alto Networks have jumped 85.7% in the year-to-date period compared with the Zacks Security industry’s return of 70%.
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 20.40X compared with the industry’s average of 18.93X. 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 60 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.