SANTA CLARA, California, September 1, 2026, 12:50 EDT — Palo Alto Networks shares slid 6.4%, erasing $20 billion in market value before its earnings report.
- Palo Alto Networks shares were down 6.42% to $357.61 as of 12:48:13 EDT.
- The decline wiped out an estimated $19.99 billion, based on 815 million shares in circulation.
- Fiscal fourth-quarter revenue guidance points to approximately $3.35 billion, while NGS ARR is expected to be about $8.93 billion.
- Options implied a 9.55% move after earnings, higher than the recent average of 5.7%.
Palo Alto Networks (NASDAQ:PANW) dropped 6.42% to $357.61 on Tuesday. The price level was registered at 12:48:13 EDT, ahead of its fiscal fourth-quarter earnings report. The decline cut about $19.99 billion from the company’s market capitalization.
The loss amounted to almost six times the $3.35 billion revenue midpoint, offering a stark assessment of the challenge rather than the outcome.
The stock began trading at $374.62, hitting a low of $357.27. Regular trading volume was at 3.51 million shares at the same time. According to Google Finance, the average daily volume is 5.80 million shares.
PANW regular-session slide
Five-minute closes in U.S. dollars; dashed line marks Monday’s $382.13 close.
The company is set to release results following the U.S. market close. The investor webcast will begin at 4:30 p.m. EDT.
Management set a significant official benchmark, forecasting revenue at $3.345 billion-$3.355 billion, a 32% increase. NGS annual recurring revenue is expected to be in the $8.90 billion-$8.95 billion range. Remaining performance obligations are projected between $20.9 billion and $21.0 billion company guidance.
The base for the third quarter had already increased due to acquisitions. Revenue totaled $3.002 billion, and NGS ARR stood at $8.13 billion. Based on guidance midpoints, sequential improvements of 11.6% and 9.8% are needed for Q4, respectively.
The sequential Q4 hurdle
Q3 actual versus the midpoint of company Q4 guidance, in billions of dollars.
Revenue
+11.6% sequential
NGS ARR
+9.8% sequential
RPO
+13.9% sequential
Source: Palo Alto Networks Q3 release and Q4 guidance; midpoint calculations by TS2.
Options markets had anticipated volatility, with Monday’s pricing signaling a 9.55% move after results, compared to a 5.7% average in the past four announcements. The projected range was $336.11-$407.07 TipRanks.
Evercore analyst Peter Levine anticipates a “solid quarter, supported by strengthening pipelines and continued platformization.” He maintained his Buy rating and $415 price target following channel checks analyst note coverage.
Wall Street remains bullish, but the cushion is thin
Ratings issued during the past three months and the 12-month target range.
Ratings and targets: Google Finance, displayed September 1, 2026; current price as of 12:48:13 EDT.
The increase was supported by acquisitions. CyberArk and Chronosphere contributed $388 million to Q3 revenue. They accounted for $1.6 billion in NGS ARR and $1.8 billion in RPO. The third quarter ended with a GAAP operating loss of $183 million, compared to $814 million in non-GAAP operating income.
Cash generation provides some balance. Adjusted free cash flow reached $910 million in Q3. The margin came in at 30.3%, under the 37.5% full-year goal. The trailing 12-month margin stood at 38.5%.
Risks: Missing revenue or ARR targets could narrow a 297-times trailing earnings multiple. Integration expenses could mean GAAP profit remains under adjusted figures. Rising bond yields may add to the downward pressure on long-term software valuations.
At 12:48, shares were trading 4.6% under the consensus analyst price target, while staying 6.4% higher than the options-implied floor. Results due after the close will determine the outcome of that difference.
