Palo Alto Networks, Inc. (PANW) continues to weather market volatility in 2022. Hedge funds were buying as the company outperformed the S&P 500. Palo Alto Network’s stock rose by over 30%, compared to the S&P 500, which has been unchanged over the past year. The cybersecurity leader was added to the WhaleWisdom Whale Index on May 17, 2022.
Palo Alto Networks is a global cybersecurity company that offers network security functions, including firewalls, threat protection, and intrusion prevention and detection. The company’s products and services have garnered a higher demand over the past four years, supporting increased cloud-based computing and remote work across industries. Palo Alto Networks utilizes its cybersecurity ecosystems to serve customers worldwide by protecting their data and reducing security complexities. The company’s three primary segments are Strata, Prisma, and Cortex. Strata is a network security platform that generates the bulk of the company’s revenue, with Prisma and Cortex representing its next-generation security (NGS) services.
Hedge Funds Buy
Palo Alto Networks saw hedge funds actively buying in the first quarter of 2022. The aggregate shares held by hedge funds increased to about 21.1 million from 20.8 million, approximately 1.6%. Of the hedge funds, 56 created new positions, 85 added to an existing one, 39 exited, and 93 reduced their holdings. Institutions also bought the stock and increased their aggregate holdings by about 2.9%, to approximately 85.5 million from 83.1 million. Also, the 13F metrics between 2014 and 2022 suggest that Palo Alto continues to have investment potential as it follows an upward trend.
Encouraging Multi-year Estimates
Analysts expect to see earnings rise through 2023, with anticipated growth that could bring earnings to $7.45 by July 2022 and $9.29 by July 2023. Year-over-year estimates forecast approximately $6.7 billion in revenue by the summer of 2023, up from $5.5 billion for 2022.
Favorable Analyst Feedback
Palo Alto Network’s stock has garnered interest and commentary from analysts. Patrick Colville of Deutsche Bank raised his firm’s price target on Palo Alto to $605 from $587 and kept a Buy rating on shares following solid third-quarter results that beat analysts’ estimates. Wedbush Securities analyst Dan Ives shared that Palo Alto’s cloud-driven strategy resonates well with cybersecurity customers. At the same time, Ives lowered the firm’s price target on the stock to $580 from $660 and kept an Outperform rating on shares. Morgan Stanley analyst Hamza Fodderwala noted the stock’s impressive billings growth and optimism that Palo Alto Network could continue its forward momentum and potentially double its market price within two years. Fodderwala shared an $823 price target on shares and an Overweight rating. Deutsche Bank analyst Patrick Colville kept a Buy rating on Palo Alto Network shares and raised the firm’s price target on the stock to $605 from $587.
Palo Alto Networks continues to outpace the S&P, despite overall market volatility. The cybersecurity leader’s multi-year earnings estimates speak to the stock’s potential. Factoring the company’s track record and analysts’ outlooks, Palo Alto Networks presents an attractive opportunity for investors.