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.
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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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