•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
The stock is trading down about 25% over the past year. Palo Alto Networks’ shares have fallen more than 25% as of this writing, and the decline accelerated after the company announced its fiscal 2026 second-quarter (Q2) earnings results last week.
Palo Alto Networks is pursuing a platformization strategy, selling its cybersecurity solutions as part of three cybersecurity platforms rather than as standalone point solutions. To support that shift, the company has been active on acquisitions.
Management said these deals strengthen Palo Alto’s positioning and expand its platformization strategy, but they are expected to weigh on earnings per share (EPS) in the near term, largely due to the stock component of the large CyberArk deal.
For fiscal 2026 Q2, ended Jan. 31, revenue rose 15% year over year to $2.59 billion. This was at the high end of the company’s prior revenue forecast range of $2.57 billion to $2.59 billion.
Service revenue increased 13% to $2.08 billion. Within that, subscription revenue grew 14% and support revenue rose 12%. Product revenue climbed 22% to $514 million, led by growth in software firewalls.
Next-generation security again drove growth. Next-generation security annual recurring revenue (ARR) surged 33% (or 28% excluding acquisitions) to $6.33 billion.
Its largest next-generation security solution, SASE (secure access service edge), saw ARR rise about 40% to more than $1.5 billion.
Adjusted earnings per share (EPS) increased 27% year over year to $1.03, ahead of guidance of $0.93 to $0.95.
For the outlook, Palo Alto updated full-year guidance by increasing revenue but lowering EPS, reflecting the impact of recent acquisitions.
Despite the stock’s weakness, the article notes that the decline has brought Palo Alto to a more attractive valuation. The forward price-to-sales ratio (P/S) is 9 times fiscal 2027 estimates, and the forward price-to-earnings ratio (P/E) is 33 times fiscal 2027 estimates.
While the acquisitions are expected to create initial EPS pressure, the article characterizes the moves as supportive of Palo Alto’s platformization approach over the long term.
It concludes that investors may consider accumulating the stock at current levels following the dip.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
