Posted 2/25/2024, 11:30:00 AM
Palo Alto Networks stock plunges 28% on risky new pricing strategy
- Palo Alto Networks (PANW) stock plunged 28% after lowering full-year guidance due to a new aggressive pricing strategy to win market share
- The strategy involves giving away products for free to help customers consolidate to Palo Alto's platform and save costs
- It's a smart strategy but carries risks of lack of demand, price wars, and margin pressure in the cybersecurity sector
- Competitor Cloudflare recently posted strong results, seemingly contradicting Palo Alto's narrative
- Palo Alto could tread water for a while until success or failure of the new strategy is proven; stock still expensive on earnings basis