Palo Alto Networks, Inc. (PANW) has outperformed the S&P 500, rising by approximately 25% compared to the S&P 500’s decline of roughly 10% over the past year. Hedge funds were buying in the first quarter of 2022 as demand for cybersecurity solutions remained strong, and the cybersecurity leader saw continued market growth. As a result, it was added to the WhaleWisdom WhaleIndex 100 on May 17, 2022.
Palo Alto Networks provides cybersecurity solutions worldwide through products and services such as firewalls, intrusion prevention and detection systems, mobile device protection, uniform resource locator filtering, and cybersecurity consulting. Palo Alto Networks brings in revenue through selling its software applications and subscriptions for the ongoing support of next-generation security (NGS) services. The company operates three distinct yet complementing ecosystems: Strata, Prisma, and Cortex. Strata is its core network security platform, Prisma is its suite of cloud-based security services, and Cortex is its artificial intelligence-powered threat detection platform.
Hedge Funds Add to Holdings
Hedge funds and institutions were buying Palo Alto Networks’ stock in the first quarter of 2022. The aggregate 13F shares held by hedge funds increased to about 21.1 million from 21.0 million, an increase of approximately 1.6%. Of the hedge funds, 56 created new positions, 85 added, 39 exited, and 93 reduced their holdings. Institutions increased their aggregate holdings by about 2.9% to approximately 85.5 million from 83.1 million. The 13F metrics from 2014 through June 2022 show that funds and stock prices continue to move on an upward trend.
Favorable Multi-year Estimates
Analysts expect to see positive revenue and earnings trend continue into 2023. The estimated growth rates could bring revenue to over $6.7 billion by July 2023. Earnings per share are expected to rise to $7.45 by July 2022 and $9.28 by July 2023.
Analysts Adjust Price Targets
While not all analysts raised price targets following quarterly results, many view Palo Alto Networks’ stock as a worthy investment. Analyst Patrick Colville of Deutsche Bank raised the price target on Palo Alto Networks to $605 from $587 and kept a Buy rating on shares. Wedbush Securities analyst, Daniel Ives, lowered the firm’s price target on the cybersecurity stock to $580 from $660 and reiterated an Outperform rating on shares. Analyst Gregg Moskowitz of Mizuho Financial Group held a Buy rating on shares with a price target of $600. Mizuho shared enthusiasm over Palo Alto Networks’ impressive billings and product revenue, noting that the company has a robust collection of cloud assets.
Palo Alto Networks continues to weather market volatility, and the cybersecurity company is showing promise in 2022. Hedge funds and institutions were buying, and revenue estimates through 2023 look favorable. There continues to be solid demand for cybersecurity and cloud services, and the company’s long-term performance makes it an attractive opportunity for investors.