Palo Alto Networks (PANW) reported fiscal third-quarter earnings and revenue that topped estimates. PANW stock popped as its outlook for the July quarter came in above expectations despite supply chain constraints.


“Large deal momentum and effective cross-platform strategies drove strength that was broad-based across product categories and geographies,” said Cowen analyst Shaul Eyal in a report. “Superior supply chain management is helping drive share gains.”

The cybersecurity firm reported April quarter earnings after the market close on Thursday. PANW stock surged 9.9% to 479.75 in morning trading on the stock market today.

Palo Alto said profit rose 30% to $ 1.79 per share on an adjusted basis. Including acquisitions, revenue rose 29% to 4 1.4 billion, the company said. Analysts expected earnings of 1.68 per share on sales of 1.36 billion.

“Supply chain constraints led demand to outstrip supply, as the company continues to see strong reception for its fourth-generation firewall products and higher levels of subscription attach rates,” said William Blair analyst Jonatan Ho in a report.

Further, billings came in at $ 1.8 billion, up 40% from a year earlier, compared with estimates for 1.6 billion.

“Palo Alto reported results that were ahead of expectations and highlighted by 40% billings growth vs. consensus at 25%,” RBC Capital analyst Matthew Hedberg said in a note to clients Another bright spot, he added, was that next-generation annual recurring revenue grew 65% to $ 1.6 billion.

PANW Stock: Guidance Tops Estimates

For the current quarter ending in July, Palo Alto said it expects per-share earnings in a range of 2.26 to $ 2.29 on revenue of $ 1.54 billion.

Analysts had projected earnings of 2.22 a share on revenue of 1.53 billion. Also, Palo Alto forecast billings of 2.33 billion compared with analyst estimates of 2.23 billion.

Meanwhile, the company has spent over $ 3.4 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.

“PANW easily possesses the strongest array of cloud assets among traditional network security vendors,” said Mizuho Securities analyst Gregg Moskowitz in a report.

Heading into the Palo Alto earnings report, the cybersecurity stock had a Relative Strength Rating of 86 out of a best-possible 99, according to IBD Stock Check-up. PANW stock has retreated 21% in 2022.

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


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