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Date

August 20, 2025

Category

Market Insights

PANW Sees Price Target Increases After Strong Q4 Earnings

Your capital is at risk if you invest. You could lose all your investment.

Palo Alto Networks stock has underperformed in recent months. It seems investors didn’t like the news that the cybersecurity company plans to buy rival CyberArk for $25 billion. Strong fiscal 2025 Q4 earnings1, posted on August 18, may have just put the stock back on an upward trajectory though. Because earnings and guidance were better than expected, and Wall Street analysts have been increasing their price targets for PANW stock since the print.

Strong Demand for Cybersecurity Solutions

For the fourth quarter of fiscal 2025, Palo Alto Networks posted revenue of $2.54 billion, up 16% year on year and above the consensus forecast of $2.50 billion. As in previous quarters, growth was driven by Next-Generation Security, where annual recurring revenue (ARR) grew 32% year over year to $5.6 billion.

Non-GAAP net income for the quarter was $673.0 million, or $0.95 per diluted share, compared with $522.2 million and $0.75 a year earlier. This earnings figure was comfortably above the consensus forecast of $0.88.

On the earnings call, Chairman and CEO Nikesh Arora stated that demand for cybersecurity remains strong. And he said that customers are looking to Palo Alto Networks to help them secure their cloud and AI transformation journeys. He also noted that the adoption of generative AI has resulted in a new and complex attack surface. As a result, the company recently introduced “Prisma AIRS,” a comprehensive AI security platform, to protect customers. 

Better-Than-Expected Guidance

In terms of guidance, the company said that for Q1 of fiscal 2026, it expects revenue of $2.45 billion to $2.47 billion and earnings per share of $0.88 to $0.90. Analysts had been expecting $2.43 billion and $0.85.

For the year, it anticipates revenue of between $10.48 billion and $10.53 billion along with earnings per share of between $3.75 and $3.85. Here, analysts had been expecting $10.43 billion and $3.67.

Price Target Increases

Since the Q4 earnings, a number of Wall Street firms have increased2 their price targets for PANW stock. Those who have lifted their targets include:

  • Barclays: $215 from $210
  • BMO Capital: $225 from $217
  • Scotiabank: $228 from $225
  • Rosenblatt: $225 from $215
  • Deutsche Bank: $235 from $220

Looking at LSEG data, the average price target is currently $2123, which is approximately 16% above the current share price. This implies that analysts see upside potential in the medium term.

CyberArk Acquisition to Boost Palo Alto’s Capabilities

Zooming in on the CyberArk deal, it could pay off if it goes through. Palo Alto Networks CEO Nikesh Arora’s strategy is to buy best-in-class businesses and integrate them into the company instead of trying to develop the technology in-house. And he sees CyberArk as a best-in-class cybersecurity firm that can help his company catch up in identity security and AI. His view is that a combination of Palo Alto Networks and CyberArk will create the leading platform for securing AI end-to-end – from managing access for agentic identities to enforcing security policy for AI apps and agents in runtime – and that the additional capabilities will help to position the firm as the “Cybersecurity Partner of Choice” for customers.

Footnotes:

1 Palo Alto Networks, Palo Alto Networks Reports Fiscal Fourth Quarter and Fiscal Year 2025 Financial Results, as of August 18, 2025
2 Investing.com, Palo Alto Networks Inc (PANW), as of August 20, 2025
3 LSEG, August 20, 2025

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