Is Palo Alto Networks Stock Built to Withstand More Downside?
Palo Alto Networks (PANW) stock is down 16.3% in 21 trading days. The recent slide reflects investor disappointment over future guidance and major acquisition concerns, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Palo Alto Networks stands today.
- Size: Palo Alto Networks is a $125 Bil company with $9.2 Bil in revenue currently trading at $185.35.
- Fundamentals: Last 12 month revenue growth of 14.9% and operating margin of 13.5%.
- Liquidity: Has Debt to Equity ratio of 0.0 and Cash to Assets ratio of 0.12
- Valuation: Palo Alto Networks stock is currently trading at P/E multiple of 109.9 and P/EBIT multiple of 78.0
- Has returned (median) 79.5% within a year following sharp dips since 2010. See PANW Dip Buy Analysis.
These metrics point to a Strong operational performance, alongside Very High valuation – making the stock Relatively Expensive. For details, see Buy or Sell PANW Stock
That brings us to the key consideration for investors worried about this fall: how resilient is PANW stock if markets turn south? This is where our downturn resilience framework comes in. Suppose PANW stock falls another 20-30% to $130 – can investors comfortably hold on? Turns out, the stock saw an impact slightly worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- PANW stock fell 36.0% from a high of $104.83 on 13 April 2022 to $67.09 on 10 January 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 26 May 2023
- Since then, the stock increased to a high of $221.38 on 28 October 2025 , and currently trades at $185.35
| PANW | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -36.0% | -25.4% |
| Time to Full Recovery | 136 days | 464 days |
2020 Covid Pandemic
- PANW stock fell 46.8% from a high of $41.54 on 18 February 2020 to $22.10 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 July 2020
| PANW | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -46.8% | -33.9% |
| Time to Full Recovery | 124 days | 148 days |
2018 Correction
- PANW stock fell 31.2% from a high of $26.15 on 14 February 2017 to $18.00 on 5 April 2017 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 18 January 2018
| PANW | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -31.2% | -19.8% |
| Time to Full Recovery | 288 days | 120 days |
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