Palo Alto Networks Stock Hits Key Support – Buying Opportunity?
Palo Alto Networks (PANW) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($168.12 – $185.82), levels from which it has bounced meaningfully before. In the last 10 years, Palo Alto Networks stock received buying interest at this level 4 times and subsequently went on to generate 24.4% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 8/14/2024 | 19.4% | 114 |
| 1/13/2025 | 24.1% | 36 |
| 4/23/2025 | 22.4% | 77 |
| 8/7/2025 | 31.7% | 82 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for PANW?
Rebound Likely Amid Strong Fundamentals and Cyber Demand
PANW’s Q1 FY2026 results exceeded estimates, projecting robust FY2026 growth. Forty analysts maintain a “Moderate Buy” with a $229.09 average target, indicating 29% upside from $176.97. The Chronosphere acquisition strengthens AI security, critical as cyber threats intensify. While P/E is elevated and some EPS estimates are trimmed, the imperative for advanced cybersecurity and platform consolidation sustains demand, underpinning a rebound from current price support, despite IT spending slowdowns and competition.
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How Do PANW Financials Look Right Now?
- Revenue Growth: 15.3% LTM and 18.1% last 3-year average.
- Cash Generation: Nearly 38.6% free cash flow margin and 13.2% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for PANW was 15.0%.
- Valuation: PANW stock trades at a PE multiple of 107.6
| PANW | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Systems Software | – |
| PE Ratio | 107.6 | 24.3 |
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| LTM* Revenue Growth | 15.3% | 6.4% |
| 3Y Average Annual Revenue Growth | 18.1% | 5.6% |
| Min Annual Revenue Growth Last 3Y | 15.0% | 0.2% |
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| LTM* Operating Margin | 13.2% | 18.8% |
| 3Y Average Operating Margin | 10.2% | 18.3% |
| LTM* Free Cash Flow Margin | 38.6% | 13.6% |
*LTM: Last Twelve Months | For more details on PANW fundamentals, read Buy or Sell PANW Stock.
And What If The Support Breaks?
PANW is not immune to big sell-offs. It fell about 31% during the 2018 correction, nearly 47% at the Covid pandemic low, and around 36% in the recent inflation shock. Even with solid fundamentals and growth, these drops show the stock can swing hard when markets turn sour. Good companies can still face steep declines when widespread fear takes hold.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read PANW Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
Still not sure about PANW stock? Consider the portfolio approach.
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