Key Takeaways
- Palo Alto Networks fell 17% in a week with CrowdStrike and Zscaler, as a sell-off in AI and chip stocks hit software’s 2026 winners.
- Palo Alto had no major bad news of its own, so it’s a better buy than a month ago, though its forward P/E is still well above its five-year average.
- Palo Alto reports Nov. 18, before CrowdStrike and Zscaler, so its organic growth is the number to watch.
Palo Alto Networks (PANW) fell 17% in the week to the Nov. 5 close, about half on Nov. 5 alone, as a post-election sell-off in AI and chip stocks reached software’s biggest winners. CrowdStrike (CRWD) fell 17% and Zscaler (ZS) 18%, about twice the Nasdaq-100’s 9% drop. None of the three bounced on Nov. 6, when the Nasdaq-100 rose 1.4%.
Palo Alto’s own news was small: The Information reported it’s in talks to buy Clutch Security, an AI-agent security startup, for about $500 million. A rounding error for a $257 billion company.
Fortinet lit the fuse
The slide began after the close on Oct. 28, when Fortinet said its product revenue growth slowed to 37% in the third quarter, from 52% in the second. CNBC’s Jim Cramer pushed back on Mad Money the next day: “Fortinet’s weakness is not a tell about a slowdown in cybersecurity.”
The rest of the group’s news leans his way. Deutsche Bank upgraded CrowdStrike to Buy on Nov. 2, and the next day CrowdStrike agreed to pay nearly $500 million for two AI security startups. Zscaler still guides to about 19% revenue growth in its fiscal first quarter.
They report on Dec. 1 and Dec. 2, so Palo Alto’s report is the group’s first read on whether Fortinet’s slowdown is spreading.
TIKR tracks 55 analysts on Palo Alto Networks. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Palo Alto Networks, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Palo Alto Networks’ Analyst Ratings
What Palo Alto has to show on Nov. 18
Palo Alto guides to fiscal first-quarter revenue of $3.30 billion to $3.31 billion, up 33% to 34%, though much of that is CyberArk, bought in February. On a pro forma basis, the full-year guide is about 15% growth, so watch Next-Generation Security ARR against its $9.54 billion to $9.56 billion guide.
Analysts expect normalized EPS to climb from $3.84 in fiscal 2026 to $4.88 in fiscal 2028.
Palo Alto paid for CyberArk mostly in stock, though, and shares outstanding have risen 22% since July 2025.
Cheaper, but still pricey
Palo Alto’s forward P/E sits well above its 57x five-year average:
It was 84x on Nov. 2, and the Nov. 5 drop took it closer to 75x. The $399 average price target sits about 27% above the Nov. 6 close.
That makes Palo Alto a better buy than it was a month ago, but not one to rush. A starter position now leaves room to add after Nov. 18 if organic growth holds up.
If ARR lands at the low end of the guide, expect investors to keep pushing the multiple toward its average.
So what is Palo Alto Networks stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
