Palo Alto stock tumbles 10% as analysts call selloff a buying opportunity

Palo Alto stock tumbles 10% as analysts call selloff a buying opportunity

Wed, September 2, 2026 at 9:25 PM GMT+3 2 min read

• PANW +1.05%
• 5AP

Palo Alto Networks Inc (NYSE:PANW, XETRA:5AP) shares fell 10% Wednesday even after the cybersecurity company beat expectations across key fourth-quarter metrics and issued fiscal 2027 guidance above Street estimates.

The company reported next-generation security (NGS) annual recurring revenue of $9.1 billion, up 63% year-over-year, topping the Street's $8.86 billion estimate and including nearly $1 billion in net new ARR.

Revenue came in at $3.41 billion versus expectations of $3.35 billion, while remaining performance obligations reached $21.2 billion against a $20.95 billion estimate. Earnings per share of $1.02 beat the $0.98 consensus.

Operating margin was roughly in line at 29.6% versus an expected 29.3%, while gross margin came in light at 74.8% versus 76%.

Analysts at BofA said the muted market reaction reflected an unusually high bar for the quarter rather than any weakness in execution, noting that elevated investor expectations, driven by anticipation around Chronosphere, CyberArk cross-sell and improving cyber demand, left investors looking for an even stronger beat.

Palo Alto Networks saw record platformization adoption with 220 new multi-platform customers, alongside strong growth across SASE (up 40%), XSIAM (up 70% to over $700 million ARR), Prisma AIRS (about $120 million ARR) and Chronosphere (over $500 million ARR), while CyberArk integration synergies are running ahead of schedule.

Jefferies analysts called it "the cleanest print for PANW in a while," noting the quarter saw some benefit from Mythos, though management indicated it remains early days for that contribution. Jefferies estimated that excluding roughly $200 million of net new ARR from Chronosphere and $70 million from CyberArk, organic net new ARR growth accelerated to about 45% year-over-year from 17% in the prior quarter.

For fiscal 2027, Palo Alto Networks guided to revenue of $14.15 billion, ahead of the Street's $13.84 billion estimate, representing 23% year-over-year growth. RPO guidance of $25.2 billion to $25.4 billion implies 19% to 20% growth, compared with 34% growth in fiscal 2026. NGS ARR guidance of $11.075 billion to $11.175 billion implies roughly $2 billion in net new ARR at the midpoint. EPS guidance of $4.18 topped the Street's $4.11 estimate.

Jefferies said it sees room for further upside in the guidance, noting the revenue outlook embeds a deceleration in the core Network Security/AI segment despite recent strength in bookings.