Palo Alto Networks (PANW 0.91%) stock is making gains in Monday's trading. The cybersecurity specialist's share price was up 9.3% as of 1:30 p.m. ET, according to data from S&P Global Market Intelligence.

Before the market opened this morning, Susquehanna analyst Shyam Patil released a note on Palo Alto Networks that maintained a positive rating on the stock. JPMorgan's Brian Essex also released a note stating that recent fears surrounding Palo Alto's outlook may be overblown. Investors are reacting positively to the coverage.

Some analysts think Palo Alto's sell-offs are overdone

Palo Alto Networks stock got crushed last week after the company issued disappointing forward guidance, but some on Wall Street believe that investors have become too bearish on the stock.

While Susquehanna's Patil lowered the stocks' one-year price target from $400 per share to $325 per share, the analyst remained bullish on the stock. Even after this morning's surge, the price target suggests additional upside of roughly 5%.

In another note released this morning, JPMorgan analyst Brian Essex said he thinks there is some misunderstanding about Palo Alto's outlook commentary and deal structure. During the earnings call last week, Palo Alto CEO Nikesh Arora indicated that he was seeing some "spending fatigue" in the cybersecurity industry. But Essex seems to think that this comment hasn't been put in the proper context and that the investor reaction may have been overly negative.

What comes next for Palo Alto?

With its last quarterly report, Palo Alto lowered its guidance for 2024. The company now expects total billings for this year to be between $10.1 billion and $10.2 billion, down from previous guidance for billings between $10.7 billion and $10.8 billion. Meanwhile, the cybersecurity specialist also lowered its sales target to between $7.95 billion and $8 billion -- down from an earlier target for revenue between $8.15 billion and $8.2 billion.

Further complicating matters, Palo Alto is in the early stages of a major strategy shift. The company plans to offer more free services in hopes of building long-term platform contracts. While it's possible this strategy shift will pay off over the long haul, it likely means financial performance will face some headwinds in the near term.