Jim Cramer has publicly endorsed Palo Alto Networks (PANW) as a compelling buy, citing improved operational metrics and strategic realignment in the cybersecurity sector. The endorsement follows a recent quarter where the company posted revenue growth exceeding analyst expectations.
- Palo Alto Networks reported Q4 revenue of $2.31 billion, exceeding the $2.27 billion consensus forecast.
- Subscription revenue grew 18% year-over-year, marking two consecutive quarters of acceleration.
- Adjusted EPS reached $2.49, above the $2.35 estimate, driven by operating leverage.
- Over 60% of PANW’s total addressable market is now linked to cloud infrastructure.
- Acquisition of Tenable in late 2024 expanded vulnerability management capabilities.
- Stock trades at a forward P/E of 38x, below its historical average of 42x.
Jim Cramer reiterated his bullish stance on Palo Alto Networks (PANW), labeling the stock a 'buy' during a recent segment on financial television. His assessment comes amid evolving market dynamics within the cybersecurity space and stronger-than-anticipated corporate performance from the company. Cramer highlighted PANW’s ability to maintain consistent gross margin expansion despite macroeconomic headwinds affecting enterprise spending. The company reported fourth-quarter revenue of $2.31 billion, surpassing the consensus estimate of $2.27 billion, with subscription revenue growing 18% year-over-year. This marks the second consecutive quarter of subscription revenue acceleration, signaling renewed customer demand for its cloud-native security platforms. Adjusted earnings per share reached $2.49, outpacing the expected $2.35, reflecting disciplined cost management and product mix enhancements. Cramer pointed to PANW’s strategic pivot toward cloud-based security solutions as a key driver of long-term value creation. With over 60% of its total addressable market now tied to cloud infrastructure, the company's focus on AI-driven threat detection and automated response capabilities positions it well against emerging cyber threats. Additionally, its acquisition of cybersecurity firm Tenable in late 2024 has expanded its visibility into vulnerability management—a critical gap in modern defense stacks. The stock reacted positively, rising nearly 5% in pre-market trading following the commentary. Investors across institutional and retail sectors are reassessing PANW’s valuation, which currently trades at a forward price-to-earnings ratio of 38x—still below its historical average of 42x. Analysts are increasingly upgrading their targets, with six new buy ratings initiated in the past month.