Palo Alto Networks stock price rose by 26% in 2024 as demand for cybersecurity continues rising globally. It also jumped because of the artificial intelligence tailwinds that have pushed other companies in the industry sharply higher. Its stock rose to a record high of $207 and then pulled back to the current $186. So, is PANW a good company to buy in 2025?
PANW is a good growth company
Palo Alto Networks is one of the fastest-growing companies in the cybersecurity industry. It offers network security, cloud security, and artificial intelligence solutions. The company takes a hybrid approach, offering hardware solutions like hardware firewalls and software solutions through a subscription model.
Palo Alto Networks’ business has done well in the past few years as it added thousands of customers globally. Its top clients include Caesars Entertainment, Salesforce, ADT, Michelin, and Better Mortgage.
PANW’s business has been in a strong trajectory, with its annual revenue growing from $3.4 billion in 2019 to over $8 billion in 2023. This trend will likely continue in the coming years, albeit at a moderate pace.
Most importantly, the company has started to profit. In the trailing twelve months (TTM), it moved from an annual net loss of $498 million in 2012 to a net profit of over $2.7 billion.
The most recent results showed that the company’s business continued doing well in the last quarter, helped by the concept of platformization. Platformization is a process where companies consolidate their security functions to reduce their complexity.
The results showed that its Q1’25 revenue came in at $2.1 billion, a 14% annual increase, beating what analysts expected. Its next-gen security ARR rose to $4.52 billion, higher than the upper side of its guidance.
The management expects the business to continue doing well. Its hope is that its NGS ARR for the second quarter will be between $4.7 and $4.75 billion, while its revenue will rise by between 12% and 14% to between $2.22 billion and $2.25 billion.
Wall Street analysts are optimistic that the company will continue to have positive double-digit growth metrics for a while. The average estimate among 50 analysts is that revenue in the current financial year will grow by 14% to $9.15 billion, followed by $10.58 billion in the next one.
Analysts are also moderately bullish about the Palo Alto Networks stock price, which they expect will grow to $204 from the current $186.
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Palo Alto Networks stock price analysis
The weekly chart shows that the PANW share price has been in a slow uptrend in the past few years and reached a record high of $207 in December. It has formed an ascending channel shown in black and moved slightly below the key support at $190.
The Relative Strength Index (RSI) has also formed an ascending channel. It has remained above the 50-week and 100-week moving averages. Therefore, the stock’s outlook is neutral with a bearish bias. A move below the lower side of the channel will point to a drop to $150.
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