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PANW secured $126 million and $72 million deals, expanding adoption across multiple security platforms.
Palo Alto Networks (PANW - Free Report) is seeing strong momentum in its platformization strategy, which enables customers to standardize multiple security products on a unified architecture rather than relying on several separate tools. The company says this approach brings security data and policies together across control points, helping customers simplify operations and respond to threats in real time. PANW is using this strategy across Network Security, Cortex and Idira, while also expanding into areas such as SASE, AI security and observability.
The strategy is gaining traction with customers. In the fourth quarter of fiscal 2026, PANW added approximately 220 net new platformizations, more than twice the volume recorded when it began tracking the metric two years ago. The company also reported net revenue retention above 120% for its platformized customer cohort in the fourth quarter, indicating that customers are expanding their use of the platform.
Customer deals in the fourth quarter showed how Palo Alto Networks is using platformization to increase sales across products. A global telecom leader signed a $126 million agreement to expand its next-generation firewall footprint and replace legacy proxy providers with Prisma Access for SASE. A premier IT service provider signed a $72 million transaction covering Network Security, Cortex and Idira, with eight-figure investments in each. PANW also secured a $53 million deal with a leading global payments platform, which included a high-seven-figure commitment to Prisma AIRS as the customer expanded its enterprise AI initiatives.
The strategy is supporting growth across PANW's major platforms. Network and AI Security revenues grew 17% in fiscal 2026, while Cortex revenues rose 25% and Idira generated $1.26 billion in pro forma revenues, up 21%. PANW is targeting more than 4,000 platformizations by fiscal 2030 as part of its goal of reaching $20 billion in NGS ARR. The strong adoption of platformization and expansion across multiple security products provide a base for continued growth. As of now, PANW will need to maintain customer adoption and execute well across its expanding product portfolio to sustain this momentum.
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 second quarter of fiscal 2027 with $5.84 billion in ARR, reflecting 25% 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 second-quarter fiscal 2027 year-over-year growth of 22% 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 115.1% in the year-to-date period compared with the Zacks Security industry’s appreciation of 104.7%.
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 22.36X compared with the industry’s average of 20.17X. The Zacks Value Score of F 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 2027 and 2028 earnings implies year-over-year growth of 8.9% and 17.6%, respectively. The estimates for fiscal 2027 have been revised up by 7 cents over the past 30 days. The same for fiscal 2028 has been revised down by 2 cents over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Is Platformization Becoming Palo Alto Networks' Biggest Growth Lever?
Key Takeaways
Palo Alto Networks (PANW - Free Report) is seeing strong momentum in its platformization strategy, which enables customers to standardize multiple security products on a unified architecture rather than relying on several separate tools. The company says this approach brings security data and policies together across control points, helping customers simplify operations and respond to threats in real time. PANW is using this strategy across Network Security, Cortex and Idira, while also expanding into areas such as SASE, AI security and observability.
The strategy is gaining traction with customers. In the fourth quarter of fiscal 2026, PANW added approximately 220 net new platformizations, more than twice the volume recorded when it began tracking the metric two years ago. The company also reported net revenue retention above 120% for its platformized customer cohort in the fourth quarter, indicating that customers are expanding their use of the platform.
Customer deals in the fourth quarter showed how Palo Alto Networks is using platformization to increase sales across products. A global telecom leader signed a $126 million agreement to expand its next-generation firewall footprint and replace legacy proxy providers with Prisma Access for SASE. A premier IT service provider signed a $72 million transaction covering Network Security, Cortex and Idira, with eight-figure investments in each. PANW also secured a $53 million deal with a leading global payments platform, which included a high-seven-figure commitment to Prisma AIRS as the customer expanded its enterprise AI initiatives.
The strategy is supporting growth across PANW's major platforms. Network and AI Security revenues grew 17% in fiscal 2026, while Cortex revenues rose 25% and Idira generated $1.26 billion in pro forma revenues, up 21%. PANW is targeting more than 4,000 platformizations by fiscal 2030 as part of its goal of reaching $20 billion in NGS ARR. The strong adoption of platformization and expansion across multiple security products provide a base for continued growth. As of now, PANW will need to maintain customer adoption and execute well across its expanding product portfolio to sustain this momentum.
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 second quarter of fiscal 2027 with $5.84 billion in ARR, reflecting 25% 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 second-quarter fiscal 2027 year-over-year growth of 22% 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 115.1% in the year-to-date period compared with the Zacks Security industry’s appreciation of 104.7%.
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 22.36X compared with the industry’s average of 20.17X. The Zacks Value Score of F 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 2027 and 2028 earnings implies year-over-year growth of 8.9% and 17.6%, respectively. The estimates for fiscal 2027 have been revised up by 7 cents over the past 30 days. The same for fiscal 2028 has been revised down by 2 cents 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.