Palo Alto falls as Guggenheim turns bearish, sets Street-low PT
** Palo Alto Networks'
PANW
shares down 0.8% to $181.75 on Mon after Guggenheim downgrades cybersecurity firm to 'sell' from 'neutral'
** Stock falls as much as 3.6% to $176.65, about a three-mth low
** Guggenheim introduces PT of $130, lowest on Wall Street, per LSEG, which implies ~29% downside to stock's Fri close
** PANW has reported several "questionable" qtrs over the last year or more, Guggenheim analyst John DiFucci wrote in note, pointing to decline in new ARR (annual recurring revenue) for total business in each of last five qtrs
** DiFucci says he understands investors' confidence that PANW management will do "whatever it takes" to succeed as leading market share vendor, but says field checks indicate "subtle softening" in momentum over the last year, and expected U.S. Federal IT spending moderation
** PANW shares currently trade at 16.9x EV/NTM rev, a premium to the avg 12.8x for peer group of seven large cap security vendors with higher consensus NTM rev growth of 17% vs PANW's 14%, DiFucci says
** Now, of 55 analysts covering PANW, recommendation breakdown is 41 "strong buy" or "buy", 11 "hold" and 3 "sell" or "strong sell"
** Median PT of $212.50 up from $197.50 on Nov 6
** In 2024, stock gained ~23%. With move on Mon, stock off ~10% from record high close of $202.95 set exactly a month ago