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Feb 18, 2026
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LONG
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Palo Alto Networks beat Q2 estimates and significantly raised its full-year revenue guidance. However, it lowered its full-year EPS guidance, causing the stock to drop 8.9% pre-market to $148.96. Despite the sharp price drop, analysts from Needham, Morgan Stanley, and Scotiabank all maintained their positive ratings (Buy/Overweight). Their new, lowered price targets ($180, $200, $223) still represent substantial upside (21% to 50%) from the pre-market price, indicating they view the sell-off as an overreaction and believe the long-term growth story remains compelling. This trade is a contrarian bet that the market has overly punished the stock for a short-term margin issue while ignoring the strength of the underlying revenue growth and platform adoption. The trade sides with the analysts who see the current price as an attractive entry point for a medium-term recovery. RISKS: The lowered earnings guidance could signal a more persistent trend of margin compression due to competition or high investment costs, which could keep the stock depressed for longer than anticipated. The market may continue to favor profitability over growth, leading to further downside. |
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These Analysts Slash Their Forecasts On Palo ...
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