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- Down 16% since the start of the year, Palo Alto Networks’ (PANW) the stock outperformed the benchmark Nasdaq index by a wide margin.
- Analysts remain optimistic about the cybersecurity company, with some predicting a rise of more than 50% in the coming year.
- The entire cybersecurity space is gaining prominence after Russia’s invasion of Ukraine and stern presidential warnings.
Now is the time to invest in a cybersecurity company Palo Alto Networks (NASDAQ:PANW) Inventory?
Like all tech stocks, shares of PANW have been dragged lower this year. However, they haven’t fallen as far as most other tech companies. Since the first trading day of the year in January, PANW stock is down 18%.
While not significant, this decline is better than the 25% drop in Charged Tech Nasdaq index on which Palo Alto Networks trades. And, despite the pullback, Palo Alto stock is still up 37% over the past 12 months, making it one of the best performing stocks of the past year.
The rise is the result of strong corporate earnings and a growing focus on cybersecurity, which has only intensified since Russia invaded Ukraine.
|PANW||Palo Alto Networks||$458.65|
More benefits for PANW shares
Despite last year’s big run, analysts continue to see more upside for PANW stocks. In April, KeyCorp raised its rating on Palo Alto shares to “outperform” and raised the stock price target to $729 from $643 previously. This suggests Palo Alto’s share price could rise another 59% from current levels.
Similarly, Wedbush raised its price target on Palo Alto Networks stock to $660 per share from $630 and gave the stock an “outperform” rating, implying a 44% upside in the coming months. . Among the 33 analysts who cover the company, the stock’s median price target is currently $635.10, which would be 34% higher than where it currently trades.
Focus on cybersecurity
The bullish calls on PANW stock come as cybersecurity remains a priority issue for US governments and businesses in the wake of Russia’s invasion of Ukraine.
In late March, President Joe Biden warned businesses of an imminent threat posed by Russian hackers, saying cyberattacks on US businesses were “coming soon” and urging businesses large and small to beef up their defenses.
Although troubling to most people, Biden’s warning played straight into the wheelhouse of Palo Alto Networks and other cybersecurity firms.
The growing emphasis on cybersecurity helps explain Palo Alto’s strong earnings streak. The company recently beat Wall Street forecasts for higher and lower results, earning $1.74 per share against estimates of $1.65.
Buy PANW shares
Cybersecurity is becoming increasingly important and Palo Alto Networks should be one of the beneficiaries. While the stock has gained 37% over the past year, analysts see much more potential in the future as governments and private sector companies work to improve their online defenses.
With an 18% drop year-to-date, investors should see this as an opportunity to buy the drop and take a position in the Santa Clara-based company. PANW stock is a buy.
As of the date of publication, Joel Baglole had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.