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Is It Too Late to Buy Palo Alto Networks Stock? | The Motley Fool

Is It Too Late to Buy Palo Alto Networks Stock? | The Motley Fool
The cybersecurity giant's pivot to a new growth strategy shows promise.

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Palo Alto Networks Stock Plunges After Earnings Report, Creating Potential Buying Opportunity

Palo Alto Networks recently reported a decline in stock price after its fiscal Q4 revenue guidance fell short of Wall Street's expectations. However, this is part of a new growth initiative for the company, which involves offering its Cortex cybersecurity platform for free to incentivize customers to consolidate their cybersecurity needs with Palo Alto Networks. This strategy is expected to result in solid revenue growth in the long run.

The company's platformization strategy has already shown promising results, with a 40% increase in platformization sales in Q3. Despite the lost revenue from the free promotional offer, the company's Q3 sales rose 15% over the prior year to $2 billion.

Palo Alto Networks is confident in its platformization strategy, setting a goal of growing annualized recurring revenue (ARR) to $15 billion by 2030. The company also continues to evolve its solutions and has strong financials, with a net income of $278.8 million in fiscal Q3 and $17.9 billion in total assets.

Wall Street analysts have given the stock an overweight rating, with a median share price of $340, indicating potential upside for shares. With its strong qualities, Palo Alto Networks stock is considered a worthwhile long-term investment, especially after the recent dip in share price.