PANW Bets Big on Secure Browsing: Is it Reshaping SASE Strategy?

Palo Alto Networks PANW is actively focusing on secure browsing to grow its Secure Access Service Edge (SASE) business. In the third quarter of fiscal 2025, SASE was the company’s fastest-growing segment. Annual recurring revenue (ARR) for SASE increased 36% year over year during the third quarter.

A major contributor for this growth is the Prisma Access Browser. This product came out of Palo Alto Networks’ acquisition of Talon. Since then, PANW has sold 3 million Prisma Access Browser licenses, growing more than 10 times from the previous year. In the third quarter, the browser made up one-third of all Prisma Access seats sold. Moreover, it has a nine-figure sales pipeline for this product, showing strong customer interest.

To make secure browsing even more effective, Palo Alto Networks recently expanded its partnership with Okta by integrating Prisma Access Browser with Okta’s Workforce Identity solution. This new integration will enable companies to make sure their employees use the secure Browser when opening their work applications. This helps keep important apps and data safe, even when people are using personal or unmanaged devices, while giving IT teams more control and insight into browser activity.

Palo Alto Networks ended the third quarter with about 6,000 SASE customers, up 22% year over year. Moreover, around 40% of new SASE customers in the third quarter were net new to the company. These numbers suggest that the Prisma Access Browser, along with tighter identity integration, could become a key part of how PANW builds out its SASE strategy.

How Competitors Fare Against PANW

Zscaler ZS and Fortinet FTNT are key rivals to Palo Alto Networks in the SASE space.

Zscaler is expanding into browser-based security. Zscaler offers cloud-native secure access through its ZIA and ZPA platforms. In the third quarter of fiscal 2025, Zscaler saw continued demand from customers replacing legacy VPNs with its zero-trust architecture.

Fortinet is also growing fast, driven by the rising adoption of its FortiSASE platform. During the first quarter of 2025, FTNT’s Unified SASE billings grew 18% year over year, accounting for 25% of its business. Fortinet stands out by delivering all core SASE capabilities within a single operating system. Fortinet also offers Sovereign SASE, a tailored solution for large enterprises and service providers that require full on-premises or in-country control of their data.

PANW’s Price Performance, Valuation and Estimates

Shares of Palo Alto Networks have gained 12.4% year to date compared with the Security industry’s growth of 21.2%.

PANW YTD Price Return Performance

From a valuation standpoint, Palo Alto Networks trades at a forward price-to-sales ratio of 12.98X, lower than the industry’s average of 14.42X.

PANW Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for PANW’s fiscal 2025 and 2026 earnings implies year-over-year growth of 15.1% and 11.3%, respectively. The estimates for fiscal 2025 have remained unchanged over the past 60 days, while the estimates for fiscal 2026 have been revised downward by a penny over the past 30 days. 

 
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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research