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Palo Alto Networks (PANW - Get Report) reports its latest earnings on Wednesday after the close, and it'll be one that investors in cybersecurity stocks will be watching closely.

Shares of the cybersecurity giant were trading down 0.9% to $214.25 on Tuesday and are up roughly 14% year to date. Ahead of its next earnings report on May 29, analysts polled by FactSet are expecting earnings of $1.25 per share on average.

As cybersecurity budgets grow, investors are keeping a close eye on how the vendors in the mix -- including Palo Alto Networks, Cisco (CSCO - Get Report) , Check Point (CHKP - Get Report) and Juniper Networks (JNPR - Get Report) -- are staking out claims in the market. 

In a recent note, Cowen analyst Nick Yako pointed out that while enterprise security budgets are still expanding, there's evidence of an oncoming slowdown. Palo Alto Networks, for its part, is relatively well insulated from the slowdown given its specific product mix, Yako wrote: "PANW's healthy mix of subscription and support revenue (60%+ of revenue), should help alleviate some of the slowdown."

In an earnings preview out on Tuesday, Barclays analyst Saket Kalia wrote that channel checks -- in which investors scrutinize distribution channels to get a feel for how programs are being received -- have come to the fore. New programs this quarter included enhancements to its Next Wave Partner Program implemented around the same time as a referral fee for its cloud security product RedLock, and it is possible that some resulting confusion among Palo Alto Networks' partners impacted its business. 

"We do not know the answer to this, but we think it's a fair question to ask on the call since this will be the first full quarter with the new partner program in place," Kalia wrote.  

During its upcoming earnings call, investors will also want to check in about Palo Alto Networks' progress in capturing more of the firewall and network equipment market, as well as newer initiatives that include an ongoing migration to cloud-based solutions.

"Our takeaway is that we think this all suggests that there is plenty of spending in cybersecurity to go around. The need for cybersecurity-related solutions is simply too great, especially considering that it was collectively viewed as the number-one risk to the United States financial system," added Jim Cramer and the Action Alerts Plus team in a note last week.

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