Palo Alto Stock Rises As Cybersecurity Firm’s Earnings Top Estimates

Palo Alto Networks (PANW) reported fiscal third-quarter earnings and revenue on Thursday that topped analyst estimates. Palo Alto stock rose as the cybersecurity firm’s July-ending quarter revenue and billings guidance came in slightly above Wall Street targets.


Including acquisitions, Palo Alto’s earnings for the April quarter were $1.38 per adjusted share, up 18% from the year-earlier period. Revenue rose 24% to $1.1 billion, the company said. Billings jumped 27% to $1.3 billion vs. estimates for 21.5% growth.

Analysts expected earnings of $1.28 a share on sales of $1.06 billion for the period ended April 30. A year earlier, Palo Alto earnings were $1.17 a share on sales of $869.4 million.

Palo Alto stock climbed 5.7% to near 362 in extended trading on the stock market today.

Meanwhile, the company has spent over $3 billion making 10 acquisitions over the past three years. With roots in the “firewall” network security market, Palo Alto aims to build a broad cloud-based security platform.

Palo Alto Stock: Earnings Guidance Edges By Estimates

For the current quarter ending in July, Palo Alto expects earnings of $1.43 per share at the midpoint of its guidance, with revenue of $1.17 billion. Analysts had predicted earnings of $1.42 a share on revenue of $1.16 billion. Palo Alto forecast billings of $1.71 billion compared with analyst estimates of $1.63 billion.

The cybersecurity stock trades well below an entry point of 403.10. Most likely, Palo Alto stock will need to form a new base to be actionable.

Additionally, Palo Alto stock owns an IBD Relative Strength Rating of only 44 out of a possible 99, according to IBD Stock Checkup.

Palo Alto is exploring a new equity structure. And one option, analysts say, would be creating a tracking stock to unlock the value of the company’s cloud business.

One key financial metric for Palo Alto, analysts say, is annual recurring revenue for its next-generation cloud business. Palo Alto is just one cybersecurity stock to watch.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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