Palo Alto Networks Inc PANW is moving higher after an analyst reiterated optimism heading into the company’s first-quarter earnings report, scheduled for Thursday.
The Analyst
Raymond James analyst Michael Turits reiterated an Outperform rating.
The Thesis
With no major changes in the competitive landscape, Turits says Palo Alto and Fortinet Inc FTNT are continuing to be viewed as share gainers.
“While channel checks were less biased to the positive than last quarter, most contacts thought the general tone of Palo Alto business was solid and pipelines were good,” Turits wrote in a note.
The analyst also said comments on Traps and Global Protect Cloud Service continue to improve and feedback has been enthusiastic on the evident.io and Redlock acquisitions.
Turits said one “nearly ubiquitous concern” in channel conversations is that new management will make changes to the channel program, which would make it more difficult to resell and make margin on cloud and subscription services, impeding the ability for the channel to make platform sales.
“While we see incremental cloud and data opportunity under the new management team, we concur that there is also both operational and strategic risk including the channel,” said Turits.
Price Action
Shares are Palo Alto closed Monday at $170.32, up 2.3 percent.
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