- Palo Alto Networks (PANW) share have dropped sharply in May, losing over 14% in the past two weeks.
- This high-flying cybersecurity company has delivered big gains since 2017 that extended well into 2022 before being derailed.
- Investors have an opportunity to buy PANW stock at a serious discount and take advantage of long-term growth that will be fuelled by rising international cybersecurity threats.
Palo Alto Networks (NASDAQ:PANW) was a rarity among tech growth stocks in 2022 — at least until mid-April. Tech stocks have been taking it on the chin all year, with double-digit losses the new normal. However, up until April 20, PANW stock had gained 12%. This wasn’t an anomaly, it was a continuation of a growth streak that kicked off in 2017. It really gained steam in 2020 as the pandemic made internet security a priority.
The economic factors that have battered the market finally caught up to Palo Alto Networks a month ago. The slide that began three weeks into April continued as Federal Reserve rate hikes added more turmoil to the market.
At this point, PANW shares have lost over 14% over the past two weeks. They are now down nearly 11% in 2022. However, this is a real opportunity for long-term growth investors to add this stock to their portfolio. With state-sponsored hacking on the rise and hybrid work becoming the new norm, cybersecurity is going to be more important than ever.
|PANW||Palo Alto Networks||$442.17|
Russia and North Korea Are Stepping Up Their Hacking
The world has become a much more dangerous place in 2022. Russia invaded Ukraine, kicking off the largest war in Europe since WWII. The U.S. has become involved by supplying arms to Ukraine. And that has raised serious concerns about retaliatory Russian hacking.
An hour before Ukraine was invaded, a series of cyber attacks hit commercial internet operations in Europe. In addition to the Ukrainian military, the attacks knocked out customers and commercial internet access in parts of Europe, including wind farms. Unsurprisingly, Russia is being blamed for that attack. The West in general is concerned about Russian hackers hitting critical infrastructure like power grids and pipelines.
In addition to Russia, North Korea has been actively testing Western internet security. With few methods to earn foreign currency, North Korea has professionally trained hacker armies it uses to great effect. In 2021 alone North Korean hackers stole $400 million worth of cryptocurrency. This country’s army of hackers has also hit financial institutions and has been blamed for devastating ransomware attacks.
This growing cybersecurity threat by state-sponsored hackers is bad news for us, but good news for Palo Alto Networks. The growing threat — and the huge amounts of money at stake — means more companies and organizations are investing in enterprise grade cybersecurity. That means a growing market for Palo Alto’s solutions. And a continued long-term growth trajectory for PANW stock.
Hybrid Work and Remote Learning Will Boost PANW Stock
Cybersecurity companies including Palo Alto Networks got a big boost from the pandemic. Many companies sent employees home to work and many students switched to remote learning. This surge in demand helped fuel PANW stock to a 135% gain from the start of 2020 to the end of 2021.
Even though that surge may have slowed, the increased demand is going to continue. Hybrid work and hybrid learning options are going to be the new normal. As soon as you have people remotely accessing critical systems, there is a big vulnerability that hackers can exploit.
We recently saw just how serious this can be. In May, Lincoln College in Illinois announced it was closing its doors after 157 years because of a catastrophic ransomware attack. At that time there were 13 ransomware attacks in 2022 that had hit American schools and colleges.
Palo Alto Networks is considered a top enterprise cybersecurity vendor. In its last quarter, revenue grew 30% year-over-year, showing that just because the pandemic is easing, demand for its services are not. In fact, they continue to grow.
Bottom Line: Should You Buy PANW Stock?
PANW stock earns an “A” rating in Portfolio Grader. It is also looked at very favorably by investment analysts. those polled by the Wall Street Journal give PANW a consensus “buy” rating. That has not changed from three months ago, despite the recent stumble by Palo Alto stock. Their average 12-month price target of $644.67 offers a very attractive 47% upside.
The bottom line is that PANW stock’s recent slide is nothing but opportunity for long-term growth investors. With state-sponsored hackers joining the fray and the stakes higher than every, cybersecurity may just be the ultimate growth industry. And Palo Alto Networks is leading the pack.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.