Palo Alto Networks Inc. (NASDAQ: PANW), reported last night a solid first quarter, and increased its guidance for the full year.
At the time of publication, however, shares in this cybersecurity firm were still over 3% lower.
Jim Cramer, a famous investor, attributes the selling to either profit taking or an expectation of a higher beat and increase.
He believes that whatever is going on this morning will be an opportunity for him to stock up on PANW.
Mad Money’s host, Michael Lewis, raised the price target for Palo Alto to $450 today. This represents a roughly 17% increase from where it is now.
Why does Cramer like Palo Alto?
Jim Cramer believes that the company’s broad product line will help it to succeed in the cybersecurity market, which he calls a “secular growing market…a never-ending weapons race.”
Cramer says to keep investing in Palo Alto Networks, as its management has a strong commitment to platformization and is driving larger deals.
PANW has added 70 platformizations to its total of 1,100 in the recently completed quarter.
Cramer anticipates that Palo Alto’s stock will continue to rise as management fulfills its commitment of achieving 2,500-3,500 platformizations before the end of the fiscal year 2030.
The shares of this cybersecurity company do not pay dividends at the moment and are therefore unattractive to income investors.
Palo Alto announced a stock split of 2-for-1
Palo Alto Networks is a great pick because the company’s management has announced a plan to split its stock 2-for-1 in advance this week.
PANW is set to begin trading with a split adjusted basis starting on the 16 th.
Stock splits are generally positive because they improve liquidity, make stocks more accessible and appealing to investors of all types and increase their appeal.
A retail investor might perceive that a stock priced at $200 is more affordable than one valued at $400.
Splits can attract investors and increase the price of a stock over time.
When management is confident in the growth potential, they will often decide to split stock.
The market interprets a split in the direction of the future as an indication that insiders are optimistic.
Evercore sees a PANW increase to $455.
Palo Alto Networks isn’t just a stock that Jim Cramer likes.
Evercore ISI analysts also increased their PANW price target this week from $455 to $455.
In its latest research note, the investment firm cited a positive outlook due to the increasing momentum of platformization in the company.
The Nasdaq listed company raised last night its revenue guidance to the range between $9.12 and $9.17 billion, with adjusted earnings per share up to as high as $6.39.
Analysts predicted $9.13 billion in revenue and $6.28 per shares.
Palo Alto’s stock is also likely to benefit from the management’s optimism.
As new information becomes available, this post Cramer recommends purchasing this stock split company during the post-earnings drop may change.
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