Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Rapid7 (NASDAQ:RPD) and the rest of the cybersecurity stocks fared in Q1.

Cybersecurity continues to be one of the fastest-growing segments within software for good reason. Almost every company is slowly finding itself becoming a technology company and facing rising cybersecurity risks. Businesses are accelerating adoption of cloud-based software, moving data and applications into the cloud to save costs while improving performance. This migration has opened them to a multitude of new threats, like employees accessing data via their smartphone while on an open network, or logging into a web-based interface from a laptop in a new location.

The 9 cybersecurity stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 5.6% on average since the latest earnings results.

Rapid7 (NASDAQ:RPD)

With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ:RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.

Rapid7 reported revenues of $209.7 million, flat year on year. This print exceeded analysts’ expectations by 0.8%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.

"As frontier models reshape the cybersecurity landscape, Rapid7's AI SOC and preemptive security infrastructure are more essential than ever," said Corey Thomas, CEO of Rapid7.Rapid7 Total Revenue

Rapid7 scored the highest full-year guidance raise but had the slowest revenue growth of the whole group. Unsurprisingly, the stock is up 9.9% since reporting and currently trades at $7.34.

Read our full report on Rapid7 here, it’s free.

Best Q1: Palo Alto Networks (NASDAQ:PANW)

Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ:PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats.

Palo Alto Networks reported revenues of $3.00 billion, up 31.1% year on year, outperforming analysts’ expectations by 2%. The business had a very strong quarter with an impressive beat of analysts’ billings and EBITDA estimates.

Story Continues

Palo Alto Networks Total Revenue

Palo Alto Networks pulled off the fastest revenue growth among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 6.2% since reporting. It currently trades at $278.70.

Is now the time to buy Palo Alto Networks? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: SentinelOne (NYSE:S)

Built on the principle of "fighting machine with machine," SentinelOne (NYSE:S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.

SentinelOne reported revenues of $276.7 million, up 20.8% year on year, in line with analysts’ expectations. It was a slower quarter as it posted EPS guidance for next quarter missing analysts’ expectations and a significant miss of analysts’ billings estimates.

SentinelOne delivered the weakest performance against analyst estimates in the group. The company added 35 enterprise customers paying more than $100,000 annually to reach a total of 1,702. As expected, the stock is down 18% since the results and currently trades at $14.77.

Read our full analysis of SentinelOne’s results here.

CrowdStrike (NASDAQ:CRWD)

Known for detecting the massive SolarWinds hack in 2020 that compromised numerous government agencies, CrowdStrike (NASDAQ:CRWD) provides cloud-based cybersecurity solutions that protect endpoints, cloud workloads, identity, and data through its Falcon platform.

CrowdStrike reported revenues of $1.39 billion, up 25.6% year on year. This print beat analysts’ expectations by 1.7%. Aside from that, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a miss of analysts’ billings estimates.

The stock is down 7.1% since reporting and currently trades at $694.47.

Read our full, actionable report on CrowdStrike here, it’s free.

Okta (NASDAQ:OKTA)

Named after the meteorological measurement for cloud cover, Okta (NASDAQ:OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.

Okta reported revenues of $765 million, up 11.2% year on year. This number topped analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ EBITDA and billings estimates.

Okta had the weakest full-year guidance update among its peers. The stock is up 23.5% since reporting and currently trades at $117.

Read our full, actionable report on Okta here, it’s free.

Market Update

Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?

These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

BlackBerry Limited BB is increasingly leveraging its profitable portfolio and intellectual property assets to create value for shareholders. The company's strategy centers on monetizing its robust patent portfolio, enhancing profitability in its software businesses, expanding recurring revenue streams and strengthening its balance sheet, which enables it to deliver long-term shareholder value. It emphasizes deploying its strong balance sheet to drive top-line growth and operational leverage, with a focus on investments rather than cost-cutting.

BlackBerry is boosting shareholder returns by cautiously allocating capital across its three profitable divisions—QNX, Secure Communications and Licensing—all of which generate positive adjusted EBITDA. QNX's adjusted EBITDA for the fiscal fourth quarter was near the high end of guidance ($17-$23 million), at $21.4 million. Secure Communications' adjusted EBITDA exceeded expectations ($11-$15 million), reaching $19.5 million. The licensing business contributed $6.3 million in adjusted EBITDA for the quarter and $21 million for the full year, remaining a steady, largely passive source of profit and cash flow for BlackBerry.

To accelerate value creation, BlackBerry has set key priorities. The company continued its share buyback program in the quarter, repurchasing 6.7 million shares for $25 million. Since launching in May last year, it has bought back 15.5 million shares totaling $60 million. Despite returning capital through $60 million in share buybacks, the company strengthened its balance sheet — an encouraging sign for long-term investors. It plans to leverage its talented workforce, trusted brand and solid financial foundation. BlackBerry is investing in growth, especially in its QNX business. Even with these investments, it expects to generate positive cash flow this fiscal year, further strengthening its net cash position. BB will continue to evaluate opportunities for additional share repurchases when appropriate.

Do BlackBerry's Competitors Hold a Financial Edge?

CrowdStrike CRWD has a strong balance sheet with ample liquidity and manageable debt obligations. Cash and cash equivalents were $4.55 billion as of April 30, 2026, providing flexibility for investment and risk management. In the first quarter of fiscal 2027, net cash generated from operations was $590.9 million, and free cash flow was $468.5 million. The company also repurchased $175.6 million of common stock in the first quarter, while long-term debt was about $745.8 million as of April 30, 2026. This liquidity and cash generation can support continued investment in research & development, sales capacity and bolt-on acquisitions as opportunities arise.

Story Continues

Palo Alto Networks PANW continues to translate growth into cash generation as recurring revenue and scale expand. In fiscal third-quarter 2026, total revenues grew 31% year over year to $3 billion, and adjusted free cash flow was $910 million versus $578 million a year ago. Management guided fiscal 2026 revenues of $11.415-$11.425 billion, non-GAAP operating margin of 28.9-29.2% and adjusted free cash flow margin of 37.5%. As of April 30, 2026, PANW reported $3.11 billion in cash and cash equivalents and short-term investments, which provides flexibility to fund integration, product development and go-to-market priorities.

BB Price Performance, Valuation & Estimates

Shares of BlackBerry have surged 52.3% in the past month compared with the Internet-Software industry's growth of 0.4%.Zacks Investment Research

Image Source: Zacks Investment Research

Regarding the price/book ratio, BB is trading at 7.3, higher than the industry's multiple of 4.36.Zacks Investment Research

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been unchanged over the past 60 days.Zacks Investment Research

Image Source: Zacks Investment Research

BlackBerry currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report

BlackBerry Limited (BB) : Free Stock Analysis Report

CrowdStrike (CRWD) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE.

Palo Alto Networks (NasdaqGS:PANW) and Deutsche Telekom launched Sovereign Cortex with T Security, an AI-driven security offering for Europe’s regulated sectors. The solution is designed around European data sovereignty requirements and regulatory frameworks, including GDPR, NIS2, and DORA. Sovereign Cortex uses Palo Alto’s Cortex SecOps platform to target customers in healthcare, financial services, the public sector, and critical infrastructure.

Palo Alto Networks, best known for its cybersecurity platforms and SecOps tools, is extending its reach into heavily regulated European industries through this new partnership. For readers tracking how large security vendors respond to tighter rules on data use and storage, Sovereign Cortex places compliance requirements at the center of the product design rather than treating them as an add-on.

For investors watching NasdaqGS:PANW, the launch highlights how the company is looking beyond its core US customer base and into markets where data residency and sovereignty are central in purchasing decisions. As European rules such as GDPR, NIS2, and DORA shape security budgets, offerings built specifically around those standards may influence how large enterprises choose long-term cybersecurity partners.

Stay updated on the most important news stories for Palo Alto Networks by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Palo Alto Networks.NasdaqGS:PANW Earnings & Revenue Growth as at Jun 2026

📰 Beyond the headline: 2 risks and 1 thing going right for Palo Alto Networks that every investor should see.

For Palo Alto Networks, Sovereign Cortex looks like a way to turn its AI-driven Cortex SecOps platform into a more region-specific offer for Europe, where rules on data residency and access are front and center. Partnering with Deutsche Telekom and T Security gives the company local distribution, an established customer base in regulated sectors, and a trusted brand on the ground, which can matter when contracts involve healthcare records, financial data, or critical infrastructure telemetry. For you as an investor, this ties directly into Palo Alto Networks’ push to grow next-generation security revenue and annual recurring revenue from platform products, while also responding to the data-sovereignty risks analysts already highlight. It also adds another AI-focused service on top of recently launched platforms such as Idira and Prisma AIRS, which points to a broader company effort to cover identity, operations, and AI workload security. Competition from providers like CrowdStrike, Fortinet, and Check Point in Europe remains intense, so future updates on customer wins, deal sizes, and attach rates for Sovereign Cortex will help show whether this offer stands out or simply matches what peers are already putting in front of regulated European buyers.

Story Continues

How This Fits Into The Palo Alto Networks Narrative

The partnership supports the narrative that Palo Alto Networks is building an integrated, AI-powered security platform by extending Cortex into a region-specific, sovereignty-focused offering that can capture more recurring spend from regulated customers. It also tests one of the narrative’s risks, because tighter regional rules and data-sovereignty laws can increase compliance costs and operational complexity, which may weigh on margins if pricing does not adequately reflect those requirements. The original narrative focuses heavily on AI, platformization, and acquisition synergies, while this sovereignty-centric partnership adds another angle on regional regulatory exposure that may not be fully reflected in earlier assumptions about international expansion.

Knowing what a company is worth starts with understanding its story. Check out one of the top narratives in the Simply Wall St Community for Palo Alto Networks to help decide what it's worth to you.

The Risks and Rewards Investors Should Consider

⚠️ Analysts have flagged rising regulatory and data-sovereignty demands as a risk, and Sovereign Cortex directly exposes Palo Alto Networks to stricter European oversight that could raise costs or slow deployment if approvals or audits take longer than expected. ⚠️ The company already faces integration and margin pressures from acquisitions and expanding AI offerings, so adding a highly tailored regional product could make it harder to maintain the operating efficiency targets that management and analysts discuss. 🎁 On the reward side, this launch aligns with demand for AI-enabled cybersecurity, giving Palo Alto Networks a way to sell higher value, compliance-heavy services into sectors where long-term contracts and high switching costs can support recurring revenue. 🎁 If Sovereign Cortex gains traction, it could reinforce Palo Alto Networks’ positioning against competitors such as CrowdStrike and Fortinet by showing that its platform can meet both AI security requirements and strict local sovereignty rules in large, regulated markets.

What To Watch Going Forward

From here, focus on how often management calls out Sovereign Cortex on earnings calls, including any disclosure on new European wins, contribution to next-generation security annual recurring revenue, and feedback from regulators. Watch whether the company balances the extra compliance and infrastructure spending required for sovereignty controls with its stated free-cash-flow margin targets, and how this product sits alongside other AI security offerings such as Prisma AIRS and Idira. It is also worth tracking how quickly European competitors and global peers respond with their own sovereignty-focused AI security products, because that will shape how differentiated this partnership with Deutsche Telekom looks over time.

To ensure you're always in the loop on how the latest news impacts the investment narrative for Palo Alto Networks, head to the community page for Palo Alto Networks to never miss an update on the top community narratives.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include PANW.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Is PANW a good stock to buy? We came across a bullish thesis on Palo Alto Networks, Inc. on Value & Momentum Portfolio's Substack. In this article, we will summarize the bulls' thesis on PANW. Palo Alto Networks, Inc.'s share was trading at $260.52 as of June 9th. PANW's trailing and forward P/E were 226.54 and 63.69 respectively according to Yahoo Finance.Cognizant Technology Solutions (CTSH) Renews Partnership With Travel + Leisure Co.

Copyright: welcomia / 123RF Stock Photo

Palo Alto Networks (PANW) is positioned as one of the leading cybersecurity platforms globally, providing cloud, network, endpoint, and AI-driven security solutions across enterprises, governments, healthcare, financial services, and telecommunications industries. The company has steadily expanded its ecosystem through platforms such as Prisma Access, Cortex XDR, Cortex XSIAM, and Prisma AIRS, reinforcing its strategy of platformization that integrates multiple cybersecurity functions into a unified solution.

Read More: 15 AI Stocks That Are Quietly Making Investors Rich

Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential

Recent developments have strengthened the long-term investment case, particularly as rising AI adoption is expected to increase the sophistication of cyberattacks, creating stronger demand for advanced cybersecurity solutions. Despite a broad sector sell-off following concerns around AI-enabled threats tied to Anthropic-related news, Palo Alto Networks appears to be benefiting from a market overreaction rather than any deterioration in fundamentals.

This was highlighted by CEO Nikesh Arora's significant $10 million open-market purchase near recent lows, signaling strong internal confidence in the company's long-term outlook. Operationally, the business continues to execute well, consistently delivering earnings beats alongside stable revenue growth of approximately 15% year-over-year.

Margin expansion has also improved materially, with the company's EV/EBITDA multiple compressing from 106x to 73x, reflecting improving profitability as the business matures. Additional positives include a newly authorized $1 billion share repurchase program and strategic partnerships such as its industrial 5G cybersecurity deal with Siemens. While the stock remains below prior highs, the combination of strong earnings momentum, expanding AI security opportunities, improving margins, and insider conviction creates a compelling bullish setup for long-term investors.

Previously, we covered a bullish thesis on Palo Alto Networks, Inc. (PANW) by Magnus Ofstad in October 2024, which highlighted the company's platformization strategy, AI-driven cybersecurity offerings, and rising demand for integrated security solutions. PANW's stock price has depreciated by 28.54% since our coverage. Value & Momentum Portfolio shares a similar view but emphasizes on improving margins, CEO Nikesh Arora's $10 million insider purchase, and expanding AI-driven cybersecurity opportunities.

Story Continues

Palo Alto Networks, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 87 hedge fund portfolios held PANW at the end of the first quarter which was 86 in the previous quarter. While we acknowledge the risk and potential of PANW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PANW and that has 10,000% upside potential, check out our report about this cheapest AI stock.

Disclosure: None.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

BlackBerry Limited's BB QNX business continues to expand beyond its established automotive operations by pursuing opportunities in the General Embedded Market (GEM), which includes industrial automation, medical instrumentation, robotics and physical AI. While automotive remains the foundation of QNX's strategy, the company views GEM as a significant growth opportunity. Approximately 20% of QNX's revenue currently comes from non-automotive verticals, and management believes the addressable market in these areas could potentially be larger than the automotive market.

The technology developed for automotive applications has been intentionally designed to be adaptable for adjacent industries, and BlackBerry has been investing in its go-to-market strategy to increase adoption. Although sales cycles in these verticals are generally long, the company stated that the pipeline it has been building is beginning to convert into customer wins.

In the fourth quarter of fiscal 2026, BlackBerry secured an important General Embedded Development Platform (GEDP) win for deployment in industrial automation controls with a major North American OEM. The company also recorded several additional wins in industrial automation, which it considers a key target vertical. In medical instrumentation, QNX OS for Safety was selected by Johnson & Johnson to power a new AI-driven heart pump. Management highlighted robotics as one of its most promising long-term opportunities, driven by the growth of physical AI. BlackBerry stated that QNX has already established itself as a platform for physical AI through its broad deployment in autonomous driving, where vehicles function as highly complex robotic systems.

The company also emphasized that its partnerships are expected to support future expansion. Arm recently introduced its Arm AGI CPU for physical AI and identified QNX as one of its foundational software ecosystem partners during the launch. BlackBerry also continues to maintain strong relationships with leading silicon providers, including NVIDIA and Qualcomm, which are expanding their presence in physical AI. Management highlighted that the company is building momentum in its robotics pipeline and expects this vertical to become a meaningful contributor to GEM growth over time. It also stated that robotics and physical AI are likely to be among the fastest-growing segments within the three GEM verticals the company is targeting, alongside industrial automation and medical instrumentation.

Story Continues

For fiscal 2027, BlackBerry expects revenues to grow 6-11% to $584-$611 million. BlackBerry expects QNX revenues of $290-$307 million, with the higher end implying nearly 15% growth and serving as its target. However, due to macroeconomic uncertainty, it has included some downside risk to the lower end of the range.

Taking a Look at BB's Competitors

CrowdStrike CRWD remains leveraged to sustained cybersecurity demand as customers consolidate tools on the Falcon platform and expand module adoption through subscriptions and Falcon Flex. AI-led launches, including agent-based workflows, broader data and browser protection, and deeper partnerships across the cloud ecosystem, support cross-sell and renewals over time. Recent acquisitions in identity and browser runtime security extend the platform's addressable use cases, while the company's liquidity and cash generation provide the flexibility to keep investing. For fiscal 2027, the company raised its net new ARR growth guidance by 520 basis points at the midpoint and updated its full-year view to include total revenues of $5.91-$5.95 billion and ARR of $6.53-$6.55 billion.

Palo Alto Networks PANW continues to benefit from higher cybersecurity priority as enterprises deploy AI and look to consolidate vendors onto fewer platforms. Platformization is translating into larger commitments, supported by expanding next-generation security ARR and RPO, and management guidance implies continued growth in the fourth quarter of fiscal 2026. Momentum in Network Security, SASE and Prisma AIRS, along with early execution on the CyberArk and Chronosphere integrations, supports the long-term revenue mix shift toward recurring software and free cash flow. For fiscal 2026, Palo Alto Networks expects revenues in the range of $11.41 billion to $11.42 billion, suggesting year-over-year growth of 24%.

BB Price Performance, Valuation & Estimates

Shares of BlackBerry have surged 41.8% in the past month compared with the Internet-Software industry's growth of 0.5%.Zacks Investment Research

Image Source: Zacks Investment Research

Regarding the price/book ratio, BB is trading at 6.93, higher than the industry's multiple of 4.35.Zacks Investment Research

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been unchanged over the past 60 days.Zacks Investment Research

Image Source: Zacks Investment Research

BlackBerry currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report

BlackBerry Limited (BB) : Free Stock Analysis Report

CrowdStrike (CRWD) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Zscaler, Inc. ZS has been under heavy pressure since late May, especially following its third-quarter fiscal 2026 results. The stock has plunged 32.4% since its last quarterly results were reported on May 26 and is now trading close to its 52-week low. As of June 10, the stock closed at $124.73, only 8.8% above its 52-week low of $114.62.

Though Zscaler reported better-than-expected third-quarter results, its preliminary guidance for fiscal 2027 turned investors increasingly cautious about its long-term prospects. The company’s fiscal 2027 guidance for both revenues and annual recurring revenues (ARR) indicates a significant growth deceleration, projecting a slowdown to a 16% to 17% year-over-year increase.

This guidance represents a material drop from the company's prior growth trajectory. Zscaler previously hovered around a mid-20s growth rate for both ARR and revenues. Management's initial 2027 outlook implies a deceleration of about 800 to 900 basis points. The company attributed this cooling forecast to sales leadership turnover (including the departure of two key sales leaders), more conservative assumptions for landing new customers, and a slower-than-expected contribution from the Red Canary acquisition.

The recent sell-off extended ZS stock’s year-to-date decline to 44.5%, making it one of the weakest performers in the cybersecurity space. The decline looks even more significant when compared to the broader Zacks Internet – Software industry, which has surged 34.2% over the same period.

The stock has also underperformed its key competitors like Fortinet, Inc. FTNT, Palo Alto Networks, Inc. PANW and CrowdStrike Holdings, Inc. CRWD. Year to date, shares of Fortinet, Palo Alto Networks and CrowdStrike Holdings have rallied 74.8%, 40.3% and 37.8%, respectively.

Zscaler YTD Price Return PerformanceZacks Investment Research

Image Source: Zacks Investment Research

However, the recent sell-off may have created an opportunity rather than a reason to exit.

Zscaler’s Strong Fundamentals Remain Intact

Despite the market's reaction, Zscaler's core business remains healthy. The company continues to post robust growth metrics. Third-quarter revenues climbed 25% to $850 million, ARR increased 25% to $3.53 billion, and remaining performance obligations (RPO) rose approximately 30% to $6.5 billion. Large customer adoption also remains strong, with 748 customers generating more than $1 million in ARR and more than 4,000 customers contributing more than $100,000 in ARR.

Profitability continues to improve. Non-GAAP operating income grew 33% year over year, while the company maintained strong cash generation. Management highlighted that Zscaler achieved "Rule of 55" performance year to date, combining strong revenue growth with healthy free cash flow margins.

Story Continues

These numbers suggest that Zscaler's business is not facing a demand collapse. Instead, investors are reacting to a moderation in growth expectations after years of exceptionally rapid expansion.

Zscaler, Inc. Price, Consensus and EPS Surprise

Zscaler, Inc. price-consensus-eps-surprise-chart | Zscaler, Inc. Quote

AI Security Could Become a Major Growth Driver for ZS

One of the biggest reasons to remain invested in Zscaler is its growing role in AI security. Management believes AI is creating one of the strongest growth opportunities in the company's history. As enterprises increasingly deploy AI applications and autonomous AI agents, cybersecurity risks are becoming more complex. Zscaler's Zero Trust architecture is designed to address these emerging threats by hiding applications from attackers and preventing lateral movement within networks.

Zscaler is already seeing strong demand for its AI-focused offerings. AI Protect bookings surpassed $100 million over the past 12 months, reflecting growing customer interest in securing AI workloads and applications.

Zscaler has also strengthened its AI strategy through partnerships with Anthropic and OpenAI and its planned acquisition of Symmetry Systems. These initiatives should help the company expand its capabilities in securing AI agents and enterprise data environments.

Given the early stage of enterprise AI adoption, this market could provide a significant long-term growth runway.

ZS’ Platform Expansion Continues to Drive Growth

Another encouraging sign is Zscaler's ability to sell more products to existing customers. The company's Data Security business has crossed $500 million in ARR and is growing more than 30% year over year. Zero Trust Branch ARR has approximately tripled year over year, highlighting strong adoption beyond the company's traditional offerings.

Perhaps most impressive is the rapid growth of "Zero Trust Everywhere" customers, which use Zscaler's solutions across users, cloud workloads and branch environments. The number of these enterprise customers increased from more than 550 in the second quarter to over 700 in the third quarter.

The company is also benefiting from its Z-Flex program, which encourages customers to commit to larger multi-year contracts. Z-Flex generated more than $480 million in total contract value during the quarter, up more than 60% sequentially. Over the past year, the program has delivered more than $1 billion in contract value.

These trends suggest that customer demand remains healthy and platform adoption is deepening.

Zscaler’s Valuation Now Looks Attractive

The recent correction has significantly reduced Zscaler's valuation premium. The stock currently trades at a forward 12-month price-to-sales (P/S) ratio of 5.27, far below the industry average of 14.75.

Zscaler Forward 12-Month Price-To-Sales RatioZacks Investment Research

Image Source: Zacks Investment Research

It also trades at a substantial discount to major peers, including Fortinet, Palo Alto Networks and CrowdStrike. Fortinet, Palo Alto Networks and CrowdStrike trade at forward P/S multiples of 12.48, 16.02 and 25.70, respectively.

This discount appears excessive, given Zscaler's strong revenue growth, expanding profitability and leadership position in Zero Trust security. While growth may slow in fiscal 2027, the company is still expected to deliver mid-to-high teens growth while generating healthy margins and cash flows.

Conclusion: Hold Zscaler Stock for Now

Zscaler's near-term outlook has clearly disappointed investors. However, the company continues to execute well operationally, expand its product portfolio, deepen customer relationships and position itself at the center of the rapidly growing AI security market.

Zscaler’s strong fundamentals, improving profitability, multiple long-term growth drivers and a valuation that has become far more reasonable after the sell-off suggest staying invested in the stock.

Currently, Zscaler carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Fortinet, Inc. (FTNT) : Free Stock Analysis Report

Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report

Zscaler, Inc. (ZS) : Free Stock Analysis Report

CrowdStrike (CRWD) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.

Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here are three S&P 500 stocks to avoid and some better alternatives instead.

Workday (WDAY)

Market Cap: $33.95 billion

Born from the vision of PeopleSoft founders after Oracle's hostile takeover of their previous company, Workday (NASDAQ:WDAY) provides cloud-based software for financial management, human resources, planning, and analytics to help organizations manage their business operations.

Why Are We Cautious About WDAY?

Revenue increased by 14.1% annually over the last two years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds Estimated sales growth of 10.9% for the next 12 months implies demand will slow from its two-year trend Operating margin improvement of 5.9 percentage points over the last year demonstrates its ability to scale efficiently

Workday’s stock price of $136.23 implies a valuation ratio of 3.3x forward price-to-sales. To fully understand why you should be careful with WDAY, check out our full research report (it’s free).

Palo Alto Networks (PANW)

Market Cap: $214.5 billion

Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ:PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats.

Why Does PANW Give Us Pause?

Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 72% Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 1.5 percentage points

Palo Alto Networks is trading at $257.51 per share, or 15.6x forward price-to-sales. Check out our free in-depth research report to learn more about why PANW doesn’t pass our bar.

Stocks We Like More

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.

Story Continues

Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Palo Alto Networks PANW is seeing strong demand for Prisma AIRS, its AI security platform. Prisma AIRS is designed to secure AI models and AI-powered applications across their lifecycle, including model scanning, red teaming and runtime protection. Management noted that enterprises are moving beyond AI experimentation and beginning to use AI in real workflows. As that happens, security becomes more important, and PANW is positioning AIRS to secure AI from development all the way through production.

Prisma AIRS' customer base tripled on a sequential basis. Prisma AIRS ended the third quarter of fiscal 2026 with more than 300 customers, up from 100 customers at the end of the second quarter. This robust growth was made possible on the back of PANW expanding the platform's capabilities over the past year. Prisma AIRS now includes AI runtime security, model security, identity security, observability and agentic endpoint protection. These additions allow customers to use a single platform to secure different parts of their AI environments.

The platform is also beginning to generate larger deals. During the third quarter, a global consulting company signed a contract worth more than $20 million to use Prisma AIRS for securing its AI applications and agents. The customer processes more than 2 trillion tokens per month on the platform. Management stated that this was the largest Prisma AIRS deal signed so far, showing that enterprise customers are increasing spending on AI security.

Further, PANW expects Prisma AIRS to reach $100 million in annual recurring revenues within the next couple of quarters despite being in the market for less than a year. The above-mentioned factors show how Prisma AIRS is becoming an important contributor to the company's future revenue growth on the back of rapid customer growth, expanding capabilities and growing enterprise adoption. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year increase of around 23.7% and 20.2%, respectively.

How Competitors Fare Against PANW

Competitors like CrowdStrike CRWD and SentinelOne S are also gaining ground through platform expansion and AI innovation.

CrowdStrike ended its first quarter of fiscal 2027 with $5.51 billion in ARR, reflecting 24% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.

Though comparatively a small competitor, SentinelOne posted first-quarter fiscal 2027 year-over-year growth of 23% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

Story Continues

PANW’s Price Performance, Valuation & Estimates

Shares of Palo Alto Networks have jumped 41% in the year-to-date period compared with the Zacks Security industry’s return of 37.2%.

PANW’s YTD Price Return PerformanceZacks Investment Research

Image Source: Zacks Investment Research

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 15.87X compared with the industry’s average of 15.09X. The Zacks Value Score of F also suggests that PANW stock is overvalued.

PANW Forward 12-Month P/S RatioZacks Investment Research

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 11.4% and 7.5%, respectively. The estimate for fiscal 2026 has been revised up by a penny over the past seven days, while the same for fiscal 2027 has been revised downward by a penny over the past seven days.Zacks Investment Research

Image Source: Zacks Investment Research

Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SentinelOne, Inc. (S) : Free Stock Analysis Report

Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report

CrowdStrike (CRWD) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

CrowdStrike's CRWD Falcon Flex subscription model is becoming an important driver of its recurring revenue growth. Falcon Flex makes it easier for customers to access multiple modules of the Falcon platform through a single contract, allowing customers to deploy additional security products over time and expand their use of the Falcon platform. This has now become the company’s primary go-to-market model.

In the first quarter of fiscal 2027, CrowdStrike added more than 300 Falcon Flex customers. Accounts using Falcon Flex now represent nearly $2 billion in ending annual recurring revenues (ARR), up 99% from the year-ago quarter. This shows that more than one-third of CrowdStrike's total ARR of $5.51 billion is now tied to Flex customers.

CrowdStrike is also seeing strong expansion within its existing Flex customer base. The company ended the first quarter of fiscal 2027 with 480 Re-Flex customers, representing nearly 25% of all Flex customers, up from 380 Re-Flex customers in the fourth quarter of fiscal 2026, representing more than 23% of total Flex customers. The average Re-Flex transaction increased ARR by 26%. Further, more than 130 customers have expanded multiple times, generating an average ARR increase of 51% compared with their original Flex contracts.

Further, strong momentum in Falcon Flex was one of the major contributors that helped CrowdStrike generate a record net new ARR of $256 million, up 32% year over year, in the first quarter of fiscal 2027. Buoyed by better-than-expected performance, CRWD raised its fiscal 2027 net new ARR outlook to be in the range of $1.28 billion to $1.30 billion, up from its prior $1.21 billion to $1.26 billion target. Here, the rising adoption of Falcon Flex could remain one of CrowdStrike’s most important contributors to its long-term growth.

The Zacks Consensus Estimate for fiscal 2027 and 2028 revenues indicates a year-over-year increase of around 23.5% and 21.5%, respectively.

How Competitors Fare Against CRWD

Competitors like Palo Alto Networks PANW and SentinelOne S are also gaining ground through platform expansion and AI innovation.

In the third quarter of fiscal 2026, Palo Alto Networks saw robust growth in its Next-Gen Security ARR, which increased 60% year over year. The growth was driven by increased customer adoption of PANW’s advanced cybersecurity offerings, including its AI-driven XSIAM platform, SASE and software firewalls.

Though comparatively a small competitor, SentinelOne posted first-quarter fiscal 2027 year-over-year growth of 23% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

Story Continues

CRWD’s Price Performance, Valuation and Estimates

Shares of CrowdStrike have jumped 37.5% in the year-to-date period compared with the Zacks Security industry’s return of 37.2%.

CRWD YTD Price Return PerformanceZacks Investment Research

Image Source: Zacks Investment Research

From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 26.15, significantly higher than the industry’s average of 15.09. The Zacks Value Score of F also suggests that CRWD stock is overvalued.

CRWD Forward 12-Month P/S RatioZacks Investment Research

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for CrowdStrike’s fiscal 2027 and 2028 earnings indicates year-over-year growth of 30.6% and 26.8%, respectively. The estimates for fiscal 2027 and 2028 have both been revised upward by 2 cents and 3 cents, respectively, over the past seven days.Zacks Investment Research

Image Source: Zacks Investment Research

CrowdStrike currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SentinelOne, Inc. (S) : Free Stock Analysis Report

Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report

CrowdStrike (CRWD) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments

Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Anthropic hat Claude Fable 5, ein Mythos-Klass-Modell, nun für Unternehmen und bezahlte Abonnenten verfügbar gemacht. Dies geschieht zwei Monate nachdem das Unternehmen Mythos aufgrund von Sicherheitsbedenken nur einer kleinen Gruppe von Benutzern zugänglich machte. Der breite Release wird ermöglicht durch neue Sicherheitsmaßnahmen, die es ermöglichen, dass einige Themen Antworten aus Claude Opus 4.8 erhalten. Fable 5 kostet 10 Dollar pro Million Eingabetoken und 50 Dollar pro Million Ausgabetoken, was der Hälfte des Preises von Mythos Preview entspricht und dem Doppelten des Preises von Opus 4.8. Anthropic hat gleichzeitig Claude Mythos 5 für eine enge Zielgruppe veröffentlicht. Es teilt sich die gleiche zugrunde liegende Modell wie Fable 5, aber mit einigen Sicherheitsmaßnahmen aufgehoben, wurde es über Project Glasswing in Zusammenarbeit mit der US-Regierung bereitgestellt. Fable 5 führt Vordertaufen-Benchmarks im Bereich Softwareentwicklung, Wissensarbeit und Visionstasks an. Stripe berichtete, dass das Modell Monate von Ingenieursarbeit in Tagen auf einer 50-Millionen-Zeilen-Ruby-Codebasismigration komprimierte. Auf Hebbias Finanzbenchmark für Seniorebenen-Begründungen erzielte Fable 5 die höchste Punktzahl aller getesteten Modelle. Die Veröffentlichung erfolgt Tage nachdem Anthropic vertraulich ein S-1 bei der SEC eingereicht hat, mit einem Umsatzwachstum von 47 Milliarden Dollar, im Vergleich zu etwa 10 Milliarden Dollar im letzten Jahr, und einer Post-Money-Bewertung von 965 Milliarden Dollar. CrowdStrike (NASDAQ:CRWD) und Palo Alto Networks (NASDAQ:PANW), beide frühe Partner von Project Glasswing, erzielten jeweils mehr als 70% zwischen April und Ende Mai aufgrund der Mythos-getriebenen Cybersecurity-Demandaufschwung. Die breitere Veröffentlichung von Fable 5 erstreckt diese These auf den allgemeinen Markt.