Palo Alto Networks’ PANW XSIAM is becoming an important growth driver. In the second quarter of fiscal 2026, XSIAM crossed the $500 million annual recurring revenue (ARR) milestone. Palo Alto Networks added nearly 150 new XSIAM customers in the second quarter, taking the total customer base to more than 600.
Here, each XSIAM customer contributes to an average of nearly $1 million in ARR. The achievement of these milestones shows that XSIAM remains one of the company’s key products for helping enterprises modernize their security operations and represents strong demand from large enterprise customers.
Palo Alto Networks is also seeing XSIAM contribute to large customer deals. In the second quarter, a global automotive leader signed a deal to help run its global security operations, in a deal worth more than $50 million, which included $20 million for XSIAM. A global technology supplier also chose XSIAM as part of a more than $40 million transformation deal to modernize its security operations globally. In another example, a leading IT services provider signed a $20 million expansion deal centered on XSIAM.
The platform is also delivering measurable results. PANW stated that more than 60% of deployed XSIAM customers are now achieving a mean time to remediation of less than 10 minutes, which is a sharp improvement from the days or weeks many teams dealt with earlier. With strong adoption, large deal wins and better customer outcomes, XSIAM looks well-placed to remain an important driver of Palo Alto Networks’ next-generation ARR growth.
The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year increase of around 21.5% and 19%, respectively.
How Competitors Fare Against PANW
Competitors like CrowdStrike CRWD and SentinelOne S are also gaining ground through platform expansion and AI innovation.
CrowdStrike ended its fourth quarter of fiscal 2026 with $4.66 billion in ARR, reflecting 20% year-over-year growth. The robust increase was fueled by the growing adoption of CrowdStrike’s Falcon Flex subscription model.
Though comparatively a small competitor, SentinelOne posted fourth-quarter fiscal 2026 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
PANW’s Price Performance, Valuation & Estimates
Shares of Palo Alto Networks have lost 7.7% in the year-to-date period compared with the Zacks Security industry’s decline of 12.2%.
PANW YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 10.44X compared with the industry’s average of 10.18X. The Zacks Value Score of F also suggests that PANW stock is overvalued.
PANW Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Palo Alto Networks’ fiscal 2026 and 2027 earnings implies year-over-year growth of 11.4 and 8.4%, respectively. Estimates for fiscal 2026 and 2027 have both been revised down over the past 60 and 30 days, respectively.
Image Source: Zacks Investment Research
Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).