Palo Alto Networks Inc NASDAQ:PANW It is the world’s leading cybersecurity company at a time when cybersecurity has never been more important. Since its origins as a leading firewall builder, Palo Alto’s business has evolved to meet the growing threats that continue to emerge.
Palo Alto Networks Today
Palo Alto Networks
As of 10/01/2025 at 04:00 PM ET
- 52 week range
- $130.04
▼
$207.24
- P/E ratio
- 22.58
- Price target
- $199.29
One such threat comes from artificial intelligence (AI), which has increased threat risks for businesses of all sizes. According to Acumen Research and Consulting, the AI-based cybersecurity market could grow from $14.9 billion in 2021 to $133.8 billion by 2030.
PANW stock has generated a total return of about 98% over the past three years and performed a 2:1 stock split in December 2024. However, in this competitive landscape, is PANW your best choice for 2025? There are a few reasons why Palo Alto still looks like a solid choice for buy-and-hold investors.
1) The company’s strategy of creating platforms is paying off
For years, the cybersecurity community has debated whether a “best-in-class” platform or approach is the right approach for companies to take to their cybersecurity. What does this mean? A company like Palo Alto offers security offerings across the entire cyber threat matrix: network security, cloud-native application protection, security operations, and endpoint security. Now, consider that dozens of cybersecurity companies offer solutions in one or more of the above categories, and you can see the nature of the debate.
In early 2024, the Palo Alto company firmly entrenched itself in the platform camp by launching its platform strategy across cloud computing services. This allows customers to get discounts (and sometimes deep discounts) on some of Palo Alto’s security offerings by purchasing multiple products from the company.
Analysts and investors initially reacted to the announcement with skepticism, but the company is delivering on the promise. In its fiscal 2025 first-quarter earnings report, Palo Alto reported a 40% year-over-year increase in annual recurring revenue (ARR) for its next generation security (NGS) products. It also increased its $1 million accounts by 13% year-on-year and its $5 million accounts by 30% year-on-year.
2) Find a share of the growing SIEM market
The Palo Alto company is making a concerted effort to enter the security information and event management (SIEM) market. A SIEM system collects and analyzes security data from different parts of an organization’s IT department, helping organizations detect and respond to security threats. It’s essential for businesses of all sizes, especially as hackers become more sophisticated.
This isn’t exactly a David versus Goliath story, but to make inroads in this market, Palo Alto will have to take market share from established players like Splunk. and Microsoft Corporation (NAProbe: MSFT). Palo Alto’s other competitors, including Fortinet Corporation Nasdaq: FascinatedThey also want their share of this pie.
This is about a $10 billion market that Palo Alto believes will grow into a $30 billion market. Palo Alto’s goal is to become the third-largest player in the industry. If the company is correct in quantifying the growth of this market, there will be a lot of market share available.
3) Evaluation has become more attractive
Palo Alto Networks stock forecast today
$199.29
14.92% upModerate purchase
Based on 44 analyst ratings
| High expectations | $240.00 |
|---|---|
| Average expectations | $199.29 |
| Low expectations | $130.00 |
Palo Alto Networks stock forecast details
Despite being down nearly 14% from its December high, PANW stock still trades at about 49.5 times forward earnings. That’s down from the 56.8x the stock demanded in December 2024, but it still represents a significant premium between tech stocks and the sector average of about 32x.
However, the value is often in the eyes of investors. Compared to 2024 my dear Crowd Strike Company Nasdaq:CRWDPalo Alto’s P/E ratio looks relatively cheap when you consider that you’re buying an industry leader.
Analysts expect the company’s profits to grow by 22%, amid expectations that Palo Alto will continue to make strides in increasing operating margins. These same analysts have mixed views on the short-term outlook for PANW stock, but the consensus price target of around $199 suggests that PANW stock will test its December split-adjusted price by the end of 2025.
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