PANW vs. CYBR: Which Cybersecurity Stock is the Better Buy Now?

Palo Alto Networks PANW and CyberArk Software CYBR are both U.S.-based cybersecurity companies that specialize in protecting enterprises from evolving digital threats. While Palo Alto focuses broadly on next-gen firewalls, cloud security and AI-driven threat detection, CyberArk leads in identity security and privileged access management. Their shared emphasis on AI-enhanced cybersecurity positions them as key players in the evolving digital security landscape.

Palo Alto Networks and CyberArk are capitalizing on the rapid improvement of the cybersecurity space, fuelled by the rise of complex attacks, including credential theft and abuse, remote desktop protocol attacks and social engineering-based initial access. Per a Mordor Intelligence report, the cybersecurity market is projected to witness a CAGR of 12.63% from 2025 to 2030.

With this robust industry growth forecast, the question remains: Which stock has more upside potential? Let us break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.

The Case for CyberArk

CYBR is leading the identity security market with its cutting-edge products. As cyber breaches grow more sophisticated, organizations are intensifying their focus on privileged access management and Zero Trust capabilities. CYBR’s offerings, such as its Zero Standing Privilege approach, are well-aligned with these industry trends, ensuring its significance in the ever-changing threat landscape.

CYBR’s $1.54-billion acquisition of Venafi, a leader in machine identity management, and the $165-million acquisition of Zilla Security have strengthened its position in the security space. These buyouts have broadened CyberArk’s capabilities in machine-to-machine security, complementing its core human identity offerings. The long-term potential to expand the company’s addressable market and enhanced ARR growth make these acquisitions promising growth drivers.

A major innovation that CyberArk is advancing lies in the emerging field of agentic AI, wherein CyberArk introduced its Secure AI Agent solution. The Secure AI Agent Solution integrates CyberArk’s platform capabilities with AI-specific discovery and context, privilege controls, policy automation, life cycle management and governance. CyberArk expects this solution to be widely available to customers later this year.

A strong demand environment, along with the sustained focus on strengthening its portfolio, has been aiding CyberArk’s financial growth. In the first quarter of 2025, the company’s sales and non-GAAP EPS rose 43.4% and 30.7%, respectively.

The Case for Palo Alto Networks

PANW remains a cybersecurity leader, offering solutions for network security, cloud security and endpoint protection. Its next-generation firewalls and advanced threat detection technologies are globally recognized and widely adopted.

PANW’s innovative product suite, strong client base and growing opportunities in areas such as Zero Trust and private 5G security continue to support its long-term growth potential. Palo Alto Networks’ strategic direction and ongoing technology advancements make it a compelling long-term investment.

For instance, PANW has upgraded its Prisma Cloud platform with Prisma Cloud Copilot, a generative AI-powered assistant. This enables security analysts to understand and respond to user queries in natural language more efficiently. Additionally, Prisma Cloud’s recent FedRAMP authorization is expected to help attract a growing number of federal agencies.

However, Palo Alto Networks is encountering some near-term challenges. The company is experiencing shortened contract durations and a slowdown in the transition to PANW’s cloud-based AI-powered platforms from its legacy platforms. Moreover, Palo Alto Networks’ $1 million-plus deals are shifting from multi-year payments to annual payments, causing the shortening of the sales cycle and affecting top-line stability.

This can cause a deceleration in Palo Alto Networks’ top-line growth. Notably, the company’s revenue growth rate has been in the mid-teen percentage range over the past year, a sharp contrast from the mid-20s percentage in fiscal 2023. In the financial results for the third quarter of fiscal 2025, its sales and non-GAAP EPS grew 15.7% and 21.2%, respectively, year over year.

How Do Estimates Compare for PANW & CYBR?

The Zacks Consensus Estimate for CyberArk’s 2025 sales and EPS implies year-over-year growth of 31.85% and 25.05%, respectively.(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The Zacks Consensus Estimate for Palo Alto Networks’ 2025 sales and EPS calls for year-over-year increases of 14.4% and 15.14%, respectively, much lower than those for CYBR.

CYBR vs. PANW: Price Performance & Valuation

Year to date, CyberArk shares have jumped 17.8% compared with the 8.5% rise in Palo Alto Networks shares.

YTD Price Performance Chart

PANW is trading at a forward sales multiple of 12.6X, lower than CYBR’s 13.71X. CyberArk does seem pricey compared with Palo Alto Networks. However, CYBR’s valuations also reflect higher growth expectations for the company.

Forward 12 Month P/S Valuation Chart

Conclusion: Buy CyberArk Stock Right Now

Both Palo Alto Networks and CyberArk are key players in the cybersecurity space, but PANW is facing near-term challenges, including shortened contract durations and slowing sales growth. In contrast, CyberArk is delivering robust growth, expanding through acquisitions, and innovating in identity and AI security. With stronger earnings momentum and a sharper focus on emerging threats, CYBR appears better positioned and more attractive for investors at present.

Currently, CyberArk flaunts a Zacks Rank #1 (Strong Buy), making the stock a stronger pick compared with Palo Alto Networks, which has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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