Posted 2/24/2024, 11:10:00 AM
Palo Alto Networks Stock Plummets 28% on Revenue Fears, But Cybersecurity Leader Still a Long-Term Buy
- Palo Alto Networks stock fell 28% after the company lowered revenue guidance for the 2nd time in 2 quarters
- The guidance cut reflects Palo Alto's strategy of adding products to customers' packages for free to get them hooked, hoping they'll pay later
- Investors panicked, fearing a brutal price war, but Palo Alto can easily turn free trials on and off so it's a cost-effective tactic
- The guidance cut and market backdrop make the stock vulnerable to further selling in the near term before recovering
- Palo Alto plays in a fast-growing cybersecurity market, so it's still a good long-term buy, just wait a week or two before jumping in