Palo Alto Networks, Inc. (NASDAQ:PANW) will release earnings results for its second quarter, after the closing bell on Tuesday, Feb. 17.Analysts expect the Santa Clara, California-based company to report quarterly earnings at 94 cents per share, up from 81 cents per share in the year-ago period. The consensus estimate for Palo Alto's quarterly revenue is $2.58 billion, versus $2.26 billion a year earlier, according to data from Benzinga Pro.According to recent news, Palo Alto Networks, on Feb. 11, said that ...

Core Insights - Palo Alto Networks is expected to report fiscal second-quarter earnings, with analysts predicting revenue growth and increased profits [1] - Options pricing indicates that traders anticipate the stock could move up to 8% in either direction following the earnings report [1] - The stock has declined approximately 9% in 2026 and is nearly 25% off its October highs [1] Financial Expectations - Analysts estimate adjusted earnings per share of 94 cents, with a 14% year-over-year revenue increase to $2.58 billion for the fiscal second quarter [1] - The average price target from 14 analysts is $218, suggesting about 30% upside from the recent close [1] Market Context - The cybersecurity sector has faced challenges, contributing to the stock's decline, but the demand for Palo Alto Networks' offerings has increased due to new security threats from AI advancements [1] - Recent acquisitions, including a $25 billion deal for CyberArk and the acquisition of AI cybersecurity firm Chronosphere, are expected to be focal points in the earnings report [1]

Palo Alto Networks (NASDAQ: PANW), one of the world's largest cybersecurity companies with more than 80,000 enterprise customers, will post its next earnings release on Feb. 17. Let's review its business model and see whether its stock is worth buying right now. Image source: Getty Images. Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue » ...

Group 1: Company Updates - Palo Alto Networks has completed its acquisition of CyberArk for $45 per share in cash and 2.2005 shares of Palo Alto stock [1] - Millrose Properties is set to release its fourth-quarter financial results on February 26 [2] - Visa reported quarterly earnings of $3.17 per share, exceeding the consensus estimate of $3.14, with quarterly revenue of $10.9 billion, surpassing the Street estimate of $10.69 billion [3] - Apple reported fiscal first-quarter revenue of $143.76 billion, beating analyst estimates of $138.42 billion, and earnings of $2.84 per share, exceeding estimates of $2.66 per share [4] Group 2: Stock Performance - Palo Alto shares fell 0.1% to close at $165.30 [5] - Millrose Properties shares gained 1.1% to close at $31.84 [5] - Visa shares gained 0.3% to settle at $329.24 [5] - Apple shares gained 0.7% to settle at $275.50 [5]

Core Viewpoint - Palo Alto Networks Inc. is highlighted as a top high-growth cybersecurity stock, with recent price target adjustments reflecting mixed feedback from resellers ahead of its fiscal Q2 2026 earnings report [1][3]. Group 1: Price Target Adjustments - Stifel reduced its price target for Palo Alto Networks from $225 to $200 while maintaining a Buy rating [1]. - Jefferies reiterated a Buy rating with a price target of $250, indicating confidence in the company's long-term prospects [4]. Group 2: Reseller Feedback - Discussions with five large cybersecurity resellers managing approximately $1.9 billion in Palo Alto-related spending revealed varied performance: two reported stronger-than-expected results, two were in line with expectations, and one indicated softer trends [3]. Group 3: Growth Prospects - Despite mixed reseller feedback, Stifel anticipates steady organic growth for Palo Alto Networks, with potential upside from the Chronosphere deal and a possible CyberArk acquisition [4]. - The CyberArk acquisition, valued at $25 billion, is expected to enhance revenue, as CyberArk reported a 20% year-over-year growth in net new annual recurring revenue in the fourth quarter [5]. Group 4: Company Overview - Palo Alto Networks serves over 70,000 organizations across more than 150 countries and has evolved from a focus on next-generation firewalls to providing AI-driven security solutions across various environments [6].

Core Insights - Palo Alto Networks has completed the acquisition of CyberArk, positioning Identity Security as a key component of its platform strategy [1] - The acquisition aims to enhance security for human, machine, and AI identities, addressing the growing threat landscape where machine identities outnumber human identities by over 80 to 1 [1] - CyberArk's solutions will remain available as a standalone platform while being integrated into Palo Alto Networks' security ecosystem [1] Company Strategy - The acquisition is part of Palo Alto Networks' strategy to secure every identity within enterprises, as identity has become the primary attack vector in modern cybersecurity [1] - The integration of CyberArk's capabilities is expected to democratize privileged access, reducing standing privileges and limiting lateral movement to mitigate identity-based attacks [1] - Palo Alto Networks plans to dual-list on the Tel Aviv Stock Exchange (TASE) under the ticker "CYBR," further solidifying its commitment to the Israeli market and its R&D center [1] Market Context - Nearly 90% of organizations have experienced identity-centric breaches, highlighting the urgency for enhanced identity security measures [1] - The acquisition is anticipated to accelerate breach response times by up to 80% for companies utilizing identity-driven security controls [1] - The move reflects the increasing importance of identity security in the context of cloud, automation, and AI advancements [1]

Core Viewpoint - Okta Inc. is considered a strong investment opportunity in the software infrastructure sector, characterized as a "contrarian value play" by analyst Jonathan Ruykhaver, who maintains an Overweight rating and a price target of $115 [1]. Valuation and Market Position - The stock is currently trading at a price-to-FY 27 sales multiple of 4.4x, significantly lower than the peer average of 9.8x, indicating a steep valuation discount that Ruykhaver believes is unwarranted due to Okta's strong execution and fundamentals [2]. - The company is positioned to benefit from the increasing importance of identity in security, with identity implicated in 80-90% of breaches, suggesting a favorable market trend for Okta [2]. Bullish and Bearish Perspectives - Bullish arguments highlight Okta's improving execution and the strategic shift towards independent identity platforms, with expectations of Net Revenue Retention (NRR) moving towards 110%+ over time [2]. - Bearish concerns focus on competitive dynamics and potential pushback from established players like CyberArk, Microsoft, and SailPoint, particularly regarding Okta's expansion into adjacent identity categories [3]. Impact of AI on Identity Security - The rise of AI agents is making identity management increasingly critical to security, which supports a positive outlook for Okta. The early engagement from over 100 customers for AI-related products indicates a potential new Total Addressable Market (TAM) [4]. - The combination of improving execution, a strengthening product portfolio, and a discounted valuation suggests that Okta is due for a re-rating as its growth story unfolds [4]. Company Overview - Okta Inc. is a cloud-based identity and access management company that enables secure connections for employees, customers, and partners to applications and systems [5].

Core Viewpoint - Analysts are cautious about large tech and growth stocks after significant gains this year, indicating a market style shift, yet they identify some large-cap stocks with substantial investment value, including Palo Alto Networks [1][2]. Company Overview - Palo Alto Networks (PANW) is recognized as a leading cybersecurity stock, with a modest increase of approximately 5% this year due to investor skepticism regarding its acquisition strategy [3][4]. Acquisition Impact - The acquisition of Chronosphere for $3.35 billion is expected to enhance Palo Alto Networks' financial performance, targeting a growing demand for data processing in the AI era [4][7]. - Chronosphere's annual recurring revenue (ARR) is reported at $160 million, with a triple-digit growth rate, suggesting a favorable acquisition multiple of about 10 times revenue [7][8]. Market Potential - Palo Alto Networks' total addressable market (TAM) has surged to $300 billion, with current annual revenue around $10 billion, indicating a penetration rate of only about 3% [8][9]. Financial Performance - For the first quarter of fiscal year 2026, Palo Alto Networks reported total revenue of $2.474 billion, a year-over-year increase of 16%, surpassing Wall Street expectations [13]. - Remaining performance obligations (RPO) grew by 24% to $15.5 billion, indicating strong future revenue potential [13]. Strategic Growth - The company aims to leverage its high stock valuation and robust cash flow to enhance growth potential, with expectations of a performance breakout in 2026 [9][25]. - The platform strategy has led to significant orders, including a $33 million contract with a U.S. government agency, highlighting the shift towards integrated solutions [17][19]. Profitability and Guidance - Palo Alto Networks maintains a strong operating margin of 30.2%, with a long-term goal of achieving a free cash flow margin exceeding 40% by fiscal year 2028 [21][23]. - The revenue guidance for fiscal year 2026 has been raised to $10.5-10.54 billion, reflecting a 14% year-over-year growth [23]. Valuation Metrics - Current valuation metrics indicate an enterprise value to fiscal year 2026 revenue ratio of 11.4 times and a free cash flow ratio of 29.7 times, suggesting attractive valuation for a company with significant growth prospects [24].

Core Viewpoint - The article discusses the insights and analyses of an independent investor with expertise in the Indian and US equity markets, emphasizing the importance of quantitative research in various financial sectors [1]. Group 1: Investor Profile - The investor holds a CFA Charter and a PhD in Finance from the University of Durham, U.K. [1] - The investor is an Honorary Associate Professor in Finance and Corporate Governance at Brunel University London [1]. - The investor runs a YouTube and Podcast channel titled "The Stock Doctor," where weekly discussions on the US and Indian markets take place [1]. Group 2: Research Focus - The investor actively engages in quantitative research in areas such as US equities, Behavioral Finance, Corporate Governance, Activist Hedge Funds, Cryptocurrencies, and M&A [1]. - The investor has published research in top-ranked peer-reviewed journals, indicating a strong academic and professional background [1].

Financial Performance - Palo Alto Networks reported a revenue growth of 15% year over year, reaching $9.22 billion for fiscal 2025 [3] - The Annual Recurring Revenue (ARR) for Next Generation Security grew 32% year over year to $5.58 billion, while the total Platform Offering (PO) increased by 24% year over year to $15.8 billion [3] - Network Security ARR reached $3.9 billion, marking a 35% year over year increase, driven by strong adoption of software firewalls and SASE solutions [4] Business Line Performance - The Cortex segment saw a significant expansion in its XSIAM customer base, which more than doubled year over year, indicating strong adoption of Next Generation Security capabilities [5] - The Security Operating Platform also experienced broad-based momentum, with NGS ARR reaching $1.7 billion, an approximately 25% year over year increase [4] Market Trends - The cybersecurity landscape is undergoing a transformation due to the rise of generative and agentic AI, prompting the company to evolve its product offerings to protect customers using AI tools [6] - The company announced its intent to acquire CyberArk, aiming to reshape the identity security category and enhance its multi-platform strategy [7][8] Strategic Direction - The company is committed to innovation across all security platforms, focusing on the integration of AI into its offerings [4][6] - The acquisition of CyberArk is expected to establish a leading platform for end-to-end AI security, positioning the company as a key player in the evolving cybersecurity landscape [8] Management Commentary - Management emphasized the importance of their dedicated workforce of over 16,000 employees in driving innovation and delivering cutting-edge technologies [9] - The management expressed confidence in the company's ability to protect customers from increasing cyber threats through their innovative solutions [9] Other Important Information - The company spent $567 million on share buybacks in 2024, raising concerns about the impact of such financial engineering on executive compensation metrics [19] - Shareholder proposals regarding adjusting financial performance metrics to exclude share repurchase impacts and declassifying the board were discussed, with the board recommending against these proposals [20][28] Q&A Summary Question: Concerns about executive compensation linked to share buybacks - Shareholders urged the board to adopt a policy that adjusts financial performance metrics to exclude the impact of share repurchases when determining executive compensation [20] Question: Issues with classified board structure - A shareholder criticized the board's practice of making director appointments outside the annual meeting cycle, arguing it undermines shareholder oversight and accountability [24]