• Stifel Nicolaus sets a price target of $200 for Palo Alto Networks (NASDAQ:PANW), indicating a potential increase of about 20.48%.
• The company faces increasing competition, particularly from Fortinet, impacting its subscription growth and market share.
• Palo Alto Networks trades at a premium valuation with a forward 12-month P/E ratio of 74.26, higher than its industry average, amidst concerns of overvaluation and slowing revenue growth.

On February 10, 2026, Stifel Nicolaus set a price target of $200 for Palo Alto Networks (NASDAQ:PANW). At the time, the stock was trading at $166, suggesting a potential increase of about 20.48%. Palo Alto Networks is a leading cybersecurity company known for its diverse revenue streams and market leadership. However, it faces challenges from competitors like Fortinet, Microsoft, and CrowdStrike.

Palo Alto Networks currently leads in market share and benefits from a diverse stream of recurring revenue. Despite this, the company is experiencing a slowdown in subscription growth due to increasing competition. Fortinet, a key competitor, is gaining favor due to its strong profitability and impressive revenue growth. This competition could impact Palo Alto Networks' ability to maintain its market share.

The stock is trading at a premium valuation, with a forward 12-month P/E ratio of 74.26, higher than the Zacks Security industry's average of 73.32. This elevated valuation is further highlighted by a Zacks Value Score of F, indicating potential overvaluation. In comparison, competitors like Check Point Software, Fortinet, and Okta have lower P/E multiples of 19.67, 30.76, and 23.66, respectively.

Concerns about Palo Alto Networks' near-term upside are growing due to slowing revenue and Next-Generation Security (NGS) Annual Recurring Revenue (ARR) growth. The company's fiscal year 2026 guidance suggests further moderation in these growth trends. Over the past three months, PANW shares have declined and fallen below key moving averages, indicating bearish momentum in the stock's performance.

Despite achieving a steady 16% year-over-year revenue growth and robust profitability in the first quarter of fiscal year 2026, Palo Alto Networks is currently rated as a sell. This is due to concerns over soft guidance, various risk factors, and its premium valuation, which overshadow its recent operational strengths. The guidance for the second quarter and the full fiscal year 2026 indicates a deceleration in revenue, remaining performance obligations (RPO), and next-gen ARR growth, suggesting a potential weakening in demand.