BofA Securities reiterated a buy rating and a $420 price target for Palo Alto Networks (NASDAQ: PANW) on Tuesday, citing expectations for robust revenue and recurring revenue metrics in the company’s fiscal fourth quarter.
The brokerage projected a 32.1% year-over-year revenue increase for the quarter ended in July, alongside a 59.9% rise in next-generation security annual recurring revenue (ARR) and a 32.6% jump in remaining performance obligations (RPO). BofA’s price target implies a potential 19.7% upside from Palo Alto Networks’ closing price of $351 on Monday.
Benchmark raised its price target to $400, while Cantor Fitzgerald set a $425 target, Stifel issued a $415 target, and UBS maintained a neutral rating with a $390 target. The stock has gained 8.5% over the past month and 90% over the past year, according to the report.
Analysts highlighted Palo Alto Networks’ platformization agreements, strong net revenue retention, and product leadership as key drivers of growth. They also noted ongoing risks tied to hardware revenue, including potential supply chain constraints affecting memory and storage components.
Palo Alto Networks is scheduled to release its fiscal Q4 2026 results on September 4. The company’s valuation metrics include a price-to-earnings ratio of 306, reflecting elevated market expectations.
Cantor Fitzgerald separately pointed to Palo Alto Networks’ launch of the AI Critical Defense Frontier Program, which integrates AI-based vulnerability discovery with network-level virtual patching to enhance cybersecurity defenses.
