• HSBC downgraded Palo Alto Networks (NASDAQ:PANW) from "Hold" to "Reduce," yet Wedbush maintains an 'Outperform' rating with a price target of $225.
• The company reported revenue of $2.47 billion, surpassing Wall Street expectations, with a gross margin of 76.9% and an operating margin of 30.2%.
• Despite a 7.3% drop in share price following the downgrade, Wedbush views the decline as a buying opportunity, highlighting the company's strong financials and market position.

Palo Alto Networks, a leading cybersecurity company known for its advanced firewall and cloud security solutions, competes with other cybersecurity firms like Fortinet and Check Point Software Technologies.

On November 20, 2025, HSBC downgraded Palo Alto Networks from a "Hold" to a "Reduce" rating, with the stock priced at $185.07 at the time. Despite the downgrade by HSBC, analysts at Wedbush maintain an 'Outperform' rating for Palo Alto Networks, setting a price target of $225. This optimism follows the company's fiscal first-quarter results, which slightly exceeded Wall Street expectations.

Palo Alto Networks reported revenue of $2.47 billion, surpassing the Street's estimate of $2.46 billion. The company's remaining performance obligations reached $15.5 billion, driven by strong performance in SASE and XSIAM. Profitability metrics were robust, with a gross margin of 76.9% and an operating margin of 30.2%, both exceeding forecasts.

Earnings per share were $0.93, above the guidance and analysts' estimate of $0.89. Despite these positive financial results, Palo Alto Networks' shares dropped 7.3% to approximately $185. Wedbush suggests this decline presents a buying opportunity for investors.

The stock experienced a decrease of 7.42% today, translating to a drop of $14.83, with a trading range between $183.20 and $199.69. Palo Alto Networks' market capitalization is approximately $123.8 billion, with a trading volume of 15.9 million shares. Over the past year, the stock has seen a high of $223.61 and a low of $144.15. Despite the recent downgrade, the company's strong financial performance and Wedbush's positive outlook may attract investors.