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Palo Alto Networks (PANW) shares are in focus today after the cybersecurity company confirmed plans to buy Israel-based CyberArk Software (CYBR).
According to PANW, the acquisition enables it to improve its offerings for customers and penetrate the identity security market at an “inflection point.”
Palo Alto Networks stock has been ripping to the upside in recent months and is currently up some 27% versus its year-to-date low set on April 7.
CyberArk Acquisition Is Constructive for PANW Shares
A strategic leap into identity security could prove a meaningful positive for PANW shares as it’s a segment growing rather aggressively amid rising AI-driven threats.
Integrating CYBR’s leadership in privileged access management with its own artificial intelligence platforms will enable Palo Alto Networks to offer end-to-end protection across human, machine, and autonomous identities.
After completing the CyberArk acquisition, the company based out of Santa Clara, California will be positioned to disrupt legacy IAM model and capitalize on demand for unified security solutions.
In short, the deal accelerates PANW’s platform strategy, potentially boosting its revenue growth, margins, and free cash flow over time. It signals long-term vision, market expansion, and deeper customer lock-in, all of which could trigger a further increase in Palo Alto Networks stock price.
Wedbush Reiterates Bullish View on Palo Alto Networks Stock
Wedbush’s senior analyst Dan Ives dubbed the CyberArk acquisition a “strategic home run” in his research note on Wednesday.
According to him, the buyout is in line with PANW’s commitment to building a one-stop shop for cyber solutions “to battle the rising threats from AI while injecting this technology into its broader portfolio.”
Wedbush expects the CYBR deal to significantly accelerate the cybersecurity firm’s AI efforts and be immediately accretive to its revenue growth and gross margins.
The firm currently has a $225 price target on PANW stock, indicating potential upside of roughly 23% from here.
Wall Street Agrees With Wedbush on Palo Alto Networks
While not as bullish as Wedbush Securities, other Wall Street firms also favor owning Palo Alto Networks stock at current levels.
The consensus rating on PANW shares remains at “Moderate Buy” with the mean target of about $213 indicating well over 15% upside from current levels.
