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Feb 21 (Reuters) - Palo Alto Networks PANW.O was headed for its biggest one-day share drop on Wednesday and sparked a selloff in cybersecurity stocks after softer client spending and steep promotions forced the company to cut its annual billings forecast.

Shares of the company fell more than 26% in early trading, putting it on course to erase nearly $30 billion in market value. Rivals such as Zscaler ZS.O, Check Point Software CHKP.Oand CrowdStrike CRWD.O dropped between 4% and 9%.

Analysts pegged Tuesday's forecast cut on the company's plan to offer up to six months of free services to customers who are switching to its one-stop-shop platform for cybersecurity products.

Cybersecurity firms are combining their offerings into a unified platform to cater to customers that are tired of buying products from different vendors and still facing security breaches.

"The strategy makes sense, and it aligns with strategies we have seen other platform vendors deploying, but we expect Palo Alto Networks stock will remain under pressure for a while as the change is contributing to a cut to billings guidance," J.P. Morgan analysts said in a client note.

The results also took a hit from a slowdown in the company's business which caters to the U.S. federal government, a trend which CEO Nikesh Arora said would likely continue until mid-2024.

At least 18 brokerages lowered their price targets on the stock, pulling down the median view to $340, according to LSEG data. Its shares ended trading at $366.09 on Tuesday.

The stock trades at a forward price-to-earnings ratio of about 60, compared with Zscaler's 89.1 and CrowdStrike's 85.47.

(Reporting by Aditya Soni in Bengaluru; Editing by Devika Syamnath)

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