Palo Alto Networks Inc. (NASDAQ:PANW) stock rose nearly 1% on Monday as investors continued to favor large-cap cybersecurity stocks. The broader market also advanced, with the Nasdaq gaining 0.31% and the S&P 500 rising 0.74%.
Palo Alto Networks’ gains appeared to reflect continued buying interest. The stock remains near its 52-week high and continues to trade within a long-term uptrend.
Technical Picture Remains Bullish
The longer-term trend remains positive. Palo Alto Networks is trading about 0.4% above its 20-day simple moving average of $334.63, roughly 9.4% above its 50-day average of $307.08 and more than 56% above its 200-day average of $214.96.
The stock also continues to benefit from a golden cross that formed in May, when the 50-day moving average moved above the 200-day moving average. That signal often reflects strengthening long-term momentum.
However, near-term momentum has softened. The moving average convergence divergence (MACD) indicator remains below its signal line, suggesting buying pressure has eased since the previous rally.
On the upside, resistance sits near $368.50, just below the stock’s 52-week high of $368.80. On the downside, support is around $315, between the 20-day and 50-day moving averages.
Cybersecurity Demand Supports Long-Term Growth
Palo Alto Networks provides cybersecurity platforms for network security, cloud security and security operations. The California-based company serves more than 80,000 enterprise customers, including more than three-fourths of the Global 2000.
The company is also positioned to benefit from rising cybersecurity demand as artificial intelligence adoption accelerates. On Thursday, technology analyst Dan Ives said on The Real Eisman Playbook that “every agent creates another endpoint,” adding that “cybersecurity spend could double over the next two to three years.”
Earnings And Analyst Outlook
The company’s next earnings report is scheduled for Sept. 1.
Wall Street expects earnings of 88 cents per share on revenue of $3.35 billion. That compares with earnings of 95 cents per share and revenue of $2.54 billion in the year-ago period.
Palo Alto Networks trades at a price-to-earnings ratio of about 288.5, reflecting its premium valuation.
Analysts maintain a Buy consensus rating with an average price forecast of $344.93. Recent analyst actions include:
- Morgan Stanley raised its price forecast to $387 on July 21 while maintaining an Overweight rating.
- Tigress Financial raised its price forecast to $430 on July 15 and reiterated its Buy rating.
- Citigroup raised its price forecast to $400 on July 13 while maintaining its Buy rating.
Benzinga Edge Rankings
Benzinga Edge assigns Palo Alto Networks a Momentum score of 97.5, reflecting strong relative price performance.
The stock receives a Value score of 3.75, indicating an expensive valuation, while its Growth score of 66.13 suggests solid, but not exceptional, growth characteristics.
Overall, the rankings point to a momentum-driven stock with valuation remaining the primary risk.
ETF Exposure
Palo Alto Networks is a major holding in several exchange-traded funds, including:
- Amplify HYG High Yield 10% Target Income ETF (NYSE:HYG): 8.44% weighting
- First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR): 8.86% weighting
- Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD): 6.70% weighting
Its sizable weighting means fund inflows and outflows can influence trading activity in the stock.
Price Action
PANW Stock Price Activity: Palo Alto Networks shares were up 0.67% at $334.04 at the time of publication on Monday, according to Benzinga Pro data.
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