Evercore ISI added Palo Alto Networks (NASDAQ:PANW) to its Tactical Underperform list in a note Tuesday, noting some moderation.
The firm said that its partner survey shows PANW long-term trends remain intact, but the quarter-on-quarter pipeline momentum indicates some moderation.
Ahead of the F3Q results, Evercore ISI conducted a quarterly survey involving 15 large partners.
"The data suggests that the ecosystem maintains a positive long-term outlook, with continued optimism regarding 12-month revenue growth acceleration," said Evercore. "However, there was some moderation in Q/Q pipeline momentum, and PANW's 'platformization' strategy received mixed reviews."
The firm believes putting a Tactical Underperform on PANW into their print is warranted as they are taking a somewhat more cautious stance.
"It's unclear to us how much visibility mgmt currently has, considering the complexity of all the moving parts," adds Evercore. "Investor confidence in meeting their billing targets hinges on a significant acceleration in the 2HFY25 and through FY26, which heavily depends on the success of this strategy."