Palo Alto Networks surges after posting better sales, earnings, and guidance than Wall Street anticipated

Palo Alto Networks is soaring after posting top- and bottom-line beats in the fourth quarter along with a bright outlook for its current fiscal year.

For the three months ended July 31, the seller of AI-enabled cybersecurity offerings generated revenues of $2.54 billion (ahead of estimates for $2.5 billion) with adjusted earnings per share of $0.95, 6 cents above Wall Street’s call.

Palo Alto Networks is basking in sell-side love after these results. Bank of America upgraded the shares to “buy,” while Truist hiked its price target to $220 from $205 and Rosenblatt upped its price target to $225 from $215.

Shares were up 6.6% in premarket trading.

The company provided Q1 and full-year 2026 guidance for sales that were modestly ahead of expectations, while the adjusted EPS outlook for both those periods more meaningfully exceeded what analysts had projected. This guidance does not include any impacts from its recently announced acquisition of CyberArk, which CEO Nikesh Arora touted as a way to offer “the most complete integrated security solution in the market” during a conference call with analysts.

“We continue to view this deal as a strategic home run by PANW as it continues its hunt to build an all-in-one solution for enterprises by adding a golden asset in CYBR who is the premier player in identity/privileged access management security,” wrote Wedbush Securities analyst Dan Ives, who included the stock in his “AI 30” list of favorites and has a $225 price target. “Cybersecurity is a clear 2nd/3rd derivative play in the AI Revolution leading to PANW ultimately emerging in the driver’s seat to gain market/mind share with last night’s strong quarter and outlook a key step forward for Nikesh & Co.”