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Forbes
20-05-2025
- Business
- Forbes
Palo Alto Networks Earnings Preview: Cybersecurity In Focus
Palo Alto Networks is scheduled to report earnings after Tuesday's close. The stock hit a record high near $208.39/share in 2025 and, as of this writing, it is currently trading near $194. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting: The company is expected to report a gain of $0.77/share on $2.27 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $0.78/share. The Whisper number is the Street's unofficial view on earnings. Charts & Data Courtesy of MarketSurge Inc. Charts & Data Courtesy of MarketSurge Inc. The company has grown its earnings nicely over the last several years. In 2020 the company earned $0.82/share. In 2021, the company earned $1.03. In 2022, earnings grew to $1.26 and in 2023 earnings came in at $2.22. In 2024, the company earned $2.84. Looking forward, earnings are expected to grow to $3.23 in 2025 and grow to $3.66 in 2026. Meanwhile, the stock sports a price to earnings ratio of 51 which is 2.1x the S&P 500. Technically, the stock has been in a downtrend since February 2025 but is currently tracing out a bullish cup-with-handle pattern. The stock is only 7% below its record high which is very encouraging. After earnings, the bulls want to see the stock gap up and rally and the bears want to see it gap down and fall. Here's the company profile according to Yahoo! finance: Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company's network security platforms include Prisma Access, a security services edge (SSE) solution, as well as Strata Cloud Manager, a network security management solution. It also provides cloud security solutions, including Prisma Cloud, a cloud native application protection platform; and Code to Cloud platform, as well as offers VM-Series and CN-Series virtual firewalls for inline network security on multi- and hybrid-cloud environments. In addition, the company provides security operation solutions through Cortex platform that includes Cortex XSIAM, an AI-driven security operations platform; Cortex XDR for the prevention, detection, and response to complex cybersecurity attacks; and Cortex XSOAR for security orchestration, automation, and response; and Cortex Xpanse for attack surface management, as well as offers threat intelligence and advisory services under the Unit 42 name. Further, it provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection, DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention. Additionally, the company offers professional services, including architecture design and planning, implementation, configuration, and firewall migration; education services, such as certifications, as well as online and in-classroom training; and support services. It sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers, and government entities operating in various industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications. The company was incorporated in 2005 and is headquartered in Santa Clara, California. From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape. Disclosure: The stock has been featured on
Yahoo
16-05-2025
- Business
- Yahoo
Should Investors Buy, Sell or Hold PANW Stock Before Q3 Earnings?
Palo Alto Networks, Inc. PANW is scheduled to report its third-quarter fiscal 2025 results on May 20. Palo Alto Networks projects its fiscal third-quarter revenues in the range of $2.26-$2.29 billion, which suggests a year-over-year increase of 14-15%. The Zacks Consensus Estimate is pegged at $2.27 billion, which implies growth of 14.6% from the year-ago reported figure. After a two-for-one stock split of PANW stocks on Nov. 20, 2024, the consensus mark for PANW's fiscal third-quarter non-GAAP earnings has remained unchanged at 77 cents over the past 90 days, which calls for a 16.7% increase from the year-ago quarter's earnings. Image Source: Zacks Investment Research Palo Alto Networks' earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.5%. Palo Alto Networks, Inc. price-eps-surprise | Palo Alto Networks, Inc. Quote Our proven model does not conclusively predict an earnings beat for Palo Alto Network this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today's Zacks #1 Rank stocks here. Though PANW currently carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Palo Alto Networks' third-quarter fiscal 2025 performance is likely to have gained from the robust traction stemming from deal wins, which is expected to have pushed its revenues up. The strength in demand for its machine learning-powered models that enable organizations to ensure zero-trust network security for enterprises is likely to have contributed to the quarterly performance. The accelerated migration to Palo Alto's cloud platform is likely to have improved the adoption of its platforms. Moreover, the increased use of the cloud and remote networks in a hybrid working environment has resulted in escalating cyberattacks. This is leading to a rise in the demand for cybersecurity solutions. PANW's fiscal second-quarter performance is likely to have benefited from this demand surge. Federal Risk and Authorization Management Program (FedRAMP) recognitions are boosting the adoption of Palo Alto Networks' products by government organizations. The company's Prisma Access, Cortex XDR, Cortex Data Lake, Prisma Cloud and WildFire received FedRAMP recognitions. This FedRAMP recognition reflects the U.S. public sector's trust in PANW's IoT security solutions. This is anticipated to have encouraged the adoption of its products during the period in discussion. However, PANW is experiencing headwinds related to cannibalization risks related to the shift from its hardware to software and cloud-based solutions. Furthermore, as PANW's recently launched software has not yet achieved scale so it is pressuring the gross margin. In the past year, shares of Palo Alto have risen 21.8%, underperforming the Zacks Internet – Software industry's return of 31.8%. Image Source: Zacks Investment Research Now, let's look at the value Palo Alto offers investors at the current levels. PANW is trading at a discount with a forward 12-month P/S of 12.52X compared with the industry's 14.04X, reflecting a fair valuation. Image Source: Zacks Investment Research Palo Alto Networks' innovative product offerings, strong customer base and expanding market opportunities in areas like Zero Trust and private 5G security solutions drive its growth potential. Palo Alto's strategic vision and continuous technological advancements make it a compelling long-term investment opportunity. Nevertheless, Palo Alto Networks' near-term prospects might be hurt by softening IT spending as enterprises postpone large tech investments due to macroeconomic uncertainties and geopolitical issues. Over the past year, Palo Alto Networks has reported a slowdown in revenues, billings and adjusted earnings growth, citing uncertain macroeconomic conditions as the main cause. Furthermore, competition from established cybersecurity players, including CrowdStrike CRWD and Zscaler ZS. To survive in the highly competitive cybersecurity market, each player must continually invest in broadening its capabilities. Over the past few years, Palo Alto Network has invested heavily to enhance its sales and marketing capabilities, particularly by increasing the sales force. This has raised its operating expenses. While Palo Alto Networks and Zscaler compete across secure web gateway, zero trust network access and security service edge solutions. ZS is also rapidly expanding its presence in AI for real-time anomaly detection, advanced threat correlation, AI-based policy recommendations, AI-based data loss prevention and AI Agents like ZDX Copilot, forcing its competitors like PANW to invest in this direction to maintain their competitiveness. PANW also competes with CrowdStrike, which provides similar solutions like endpoint protection through Cortex XDR, combining endpoint, network, and cloud data to detect and respond to threats. Palo Alto Networks' Prisma Cloud also competes with CrowdStrike's Falcon Cloud Security. Palo Alto Networks is facing stiff competitive, macroeconomic and product adoption and revenue cannibalization challenges. However, the company's aggressive go-to-market strategy is enabling it to gain customers rapidly. While near-term headwinds are a concern for investors, long-term potential makes PANW stock worth holding at present. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report Zscaler, Inc. (ZS) : Free Stock Analysis Report CrowdStrike (CRWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
