'Buy on any pullback': analysts believe in Palo Alto stock despite 8% drop

Shares of cybersecurity solutions provider Palo Alto Networks plummeted 8% on Nov. 20 after a quarterly report that failed to impress investors. Despite this, some Wall Street analysts reiterated their advice to buy the company's securities and see the drop as a buying opportunity. They see the developer as one of the main beneficiaries of the focus on cybersecurity in the AI era.

Shares of Palo Alto Networks plunged nearly 7.5% in trading on Nov. 20 to $185, and at one point were down to $183.7. That became their lowest since late August. Including the collapse, the company's market value has risen 1% since the start of 2025. For comparison: the main U.S. stock index S&P 500 for the same period added about 12.5%.

Palo Alto Networks beat analysts' earnings and revenue forecasts, but it wasn't enough to impress investors, writes Barron's. Adjusted net income for the last quarter amounted to 93 cents per share, while analysts were expecting 89 cents, and revenue rose 16% year over year to $2.47 billion against a consensus forecast of $2.46 billion, the publication adds. At the same time, Palo Alto announced the purchase of Chronosphere, a cybersecurity company that specializes in surveillance tools, for $3.35 billion.

"We would buy on any pullback," Evercore ISI analyst Peter Levin noted in Barron's outline. - Palo Alto Networks' long-term fundamentals remain strong, and we see the company as a resilient player supported by solid execution, accelerating platform adoption and a growing presence in the enterprise segment." Evercore's $250 price target implies the company's market value is up another 35% from its Nov. 20 closing level. The analyst also noted that Palo Alto shareholders should like the Chronosphere deal because it will make it easier to prevent cyberattacks.

DA Davidson analyst Rudy Kessinger maintained a buy recommendation for Palo Alto stock and a target price of $240 - nearly 30% above current quotes, Behzinga reports. Kessinger noted that the company reported a strong first quarter and emphasized that the Chronosphere purchase would add fast-growing revenue from subscription services and strengthen the platform's expansion. According to the analyst, Palo Alto stock may come under pressure in the short term due to transaction costs, but the current drawdown is a good entry point for investors. Fundamentals remain strong, DA Davidson emphasized.

Rosenblatt analyst Katherine Tribnick also reiterated a Buy recommendation on Palo Alto and maintained her target price at $250. According to Tribnick, the stock sag after the report is solely due to market sentiment and not to a deterioration in the company's fundamentals. She emphasized that Palo Alto is actively strengthening its presence in key segments of the AI era - identity management, observability and AI security - through strategic acquisitions.

Out of 55 analysts covering Palo Alto Networks stock, 42 of them advise investors to buy the stock (Buy and Overweight ratings). Another 12 are neutral with a Hold rating and only one recommends selling. Wall Street's average target price of $226 is about 22% above Thursday's closing level.

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