PANW Stock Pops As Earnings, Revenue Top Estimates

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.

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“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 11.1% to 484.84 in early 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 $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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