Fresh Bullish Coverage Props Up Cybersecurity Stock

The security sports an over 25% year-over-year lead

Digital Content Manager
Aug 1, 2022 at 10:12 AM
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Palo Alto Networks Inc (NASDAQ:PANW) is up 1.5% to trade at $506.78 this morning, after Wolfe Research initiated coverage of the stock with an "outperform" rating. The firm cited the expansion of the company's next-generation security business, which may help PANW surge as much as 40%.

Wolfe Research is joining a bullish brokerage bunch, with 23 of the 24 analysts covering Palo Alto Networks stock calling it a "buy" or better, while the 12-month consensus target price of $632.58 is a 26.2% premium to its current perch. Meanwhile, the 7.26 million shares sold short make up 7.4% of the stock's available float, or nearly one week's worth of pent-up buying power.

A sentiment shift in the options pits could keep tailwinds blowing for Palo Alto Networks stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 1.08 ranks higher than 95% of annual readings, meaning long puts have been picked up at a much quicker-than-usual clip of late.

What's more, PANW sports attractively priced premiums at the moment. The stock's Schaeffer's Volatility Index (SVI) of 36% stands in the low 18th percentile of readings from the past year, meaning options traders are pricing in low volatility expectations for the equity right now. 

Digging deeper, a ceiling at the $530 level has rejected the security's rallies in June and July. Shares are today looking to move above the 40-day moving average, after a brief dip below it, and could nab a fourth-straight daily gain. Longer term, PANW sports a 25.1% year-over-year lead.

 

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