PANW Stock: Cybersecurity Firm Palo Alto Gets Best Estimates on Cloud Growth

PANW Stock: Cybersecurity Firm Palo Alto Gets Best Estimates on Cloud Growth

Shares in Palo Alto Networks (PANW) climbed on Wednesday after the cybersecurity company’s fiscal third quarter earnings beat Wall Street targets while revenue hit views. Strong customer growth for cloud-based services was a bright spot for PANW stock in the April quarter.


Palo Alto earnings for the quarter ending April 30 rose 83% to $1.10 on an adjusted basis. Additionally, PANW stock revenue rose 24% to $1.72 billion, including acquisitions.

Analysts had expected earnings of 93 cents per share on sales of $1.72 billion.

Billings, a measure of sales growth, rose 26% to $2.3 billion, beating estimates of $2.228 billion.

Big bright spot of customer growth

“The company’s strategy continues to drive significant large deal activity, including deals over $10 million growing 136% from the prior year quarter, deals over $5 million up 62% and deals over $1 million up 29%,” William Blair analyst Jonathan Ho said in a report. He added, “There continues to be a tailwind of customers consolidating their purchases with Palo Alto’s suite of solutions.

With its roots in the “firewall” network security market, Palo Alto has built an extensive cloud-based security platform. Firewall devices protect computer networks by blocking online intrusions and monitoring web applications. Acquisitions have been a big part of Palo Alto’s strategy.

Also in the April quarter, annual recurring cloud platform product revenue increased 60% to $2.57 billion. That beat PANW stock analyst estimates of $2.51 billion.

PANW Stock: Earnings Outlook Above Views

For the current quarter ending in July, the cybersecurity company forecast Palo Alto earnings of $1.28 per share on revenue of $1.95 billion amid its outlook. Meanwhile, analysts had estimated earnings of $1.20 per share on revenue of $1.95 billion.

PANW stock rose 4.7% to 198.65 in early trading in the stock market today. Palo Alto released its results after the market closed on Tuesday.

Palo Alto stock was up 36% for 2023 through Tuesday’s market close. It is trading on a five-week flat basis with a buy point of 203.54.

Additionally, it holds a relative strength rating of 88 out of the best possible 99, according to IBD Stock Checkup.

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


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