Please ensure Javascript is enabled for purposes of website accessibility

Why Palo Alto Networks Stock Gained 20% in April

By Demitri Kalogeropoulos - May 11, 2020 at 2:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are betting the pandemic won't halt the cybersecurity specialist's recent momentum.

What happened

Palo Alto Networks (PANW -1.99%) shares outperformed a rallying market last month, gaining 20% compared to a 13% increase for the S&P 500, according to data provided by S&P Global Market Intelligence.

The boost put the cybersecurity specialist back ahead of the market, but its shares remain in modestly negative territory year to date, down 5%.

Inside a cybersecurity division.

Image source: Getty Images.

So what

Palo Alto Networks' stock was hit hard during the market's plunge during February and March; some of April's bounce reflected investors regaining some optimism. The company also just closed its acquisition of CloudGenix for $420 million, the latest in a long string of potentially high-return purchases aimed at bulking up its security platform.

Now what

Palo Alto Networks will announce its fiscal third-quarter results on May 21. Back in February, executives predicted that sales growth would speed up slightly compared to the prior quarter's 15% boost. However, the COVID-19 pandemic may have led some clients and potential clients to delay cybersecurity projects, and the company has struggled with weak firewall sales in recent quarters.

Yet most investors who follow the stock are still expecting double-digit sales increases for this quarter and fiscal 2020.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Palo Alto Networks, Inc. Stock Quote
Palo Alto Networks, Inc.
$491.91 (-1.99%) $-9.97

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.