Palo Alto Networks (PANW) has technically formed a pattern similar to its 2019–2021 flat period. Back then, after two tops (points 1 and 2) and a sharp bear trap breakdown below the current range (point 3), PANW retested the upper side of the range once more (point 4), which was followed by a massive breakout. From point 3 to the top, PANW rallied 361.8% of the range width, delivering more than a 130% return in about a year and a half.
Currently, PANW appears to be forming a smaller version of that same pattern. Points 1, 2, and 3 seem to be in place, and we are now at point 4. Excluding fundamentals, if the same pattern completes, the technical target could be around $367, an over 80% potential return from current levels. However, it may be wise to wait for a confirmed breakout for validation.
On the fundamental side, PANW appears to be trading at a high valuation compared to both its historical averages and sector peers. The 2-year forward P/E average is 51.2x, while the current forward P/E sits at 55.5x not drastically higher, but still elevated. That said, Palo Alto is expected to post 14.29% year-over-year revenue growth with a strong operating margin in the upcoming earnings report.
Currently, PANW appears to be forming a smaller version of that same pattern. Points 1, 2, and 3 seem to be in place, and we are now at point 4. Excluding fundamentals, if the same pattern completes, the technical target could be around $367, an over 80% potential return from current levels. However, it may be wise to wait for a confirmed breakout for validation.
On the fundamental side, PANW appears to be trading at a high valuation compared to both its historical averages and sector peers. The 2-year forward P/E average is 51.2x, while the current forward P/E sits at 55.5x not drastically higher, but still elevated. That said, Palo Alto is expected to post 14.29% year-over-year revenue growth with a strong operating margin in the upcoming earnings report.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.