Palo Alto Networks’ stock sinks toward worst day on record upon ‘abrupt pivot’

Palo Alto Networks Inc. shares could be headed for their worst day on record as Wall Street frets about a strategic pivot that’s expected to hit results in the near term. The stock was off 24.7% in premarket trading Wednesday after the company missed expectations with its outlook in light of a change in strategy meant to get more customers to adopt a broader suite of its offerings — a move that prompted several analysts to abandon their bullish views on Palo Alto Networks shares
PANW,
-0.09%.

If Wednesday’s premarket action carried through to the close, it would mark the worst one-day percentage drop for Palo Alto Networks in its history. The current record is a 24.2% plunge, which took place on March 1, 2017. “Palo Alto Network’s shift towards platformization, consolidating point products onto one of their three platforms, raises concerns about thepotential for a slower path to achieving the company’s goals,” wrote Rosenblatt Securities analyst Catharine Trebnick. “This strategic move could have several near-term and mid-term impacts on stakeholders.” Trebnick, who downgraded the stock to neutral from buy Wednesday, noted that the move could make channel partners frustrated “by having to sell more products within the same budget constraints.” Additionally, it could take time to train the sales teams on the new messaging. Meanwhile, Palo Alto Networks is also trying to position itself more as an artificial-intelligence leader b …

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