What to Expect From Palo Alto Earnings

By Chris Lange Updated Jan 13, 7:31AM EST · Published May 26, 12:10PM EDT

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What to Expect From Palo Alto Earnings — © Thinkstock

Palo Alto Networks Inc. (NYSE: PANW) is scheduled to report its fiscal third-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters are $0.42 in earnings per share on $339.48 million in revenue. In the same period of the previous year, it posted per-share earnings of $0.23 and $234.17 million in revenue.

This company was a momentum trader’s dream between 2013 and 2015, and it may have more investors looking the company’s way again after the big sell-off. Palo Alto is helping to lead a new era in cybersecurity by protecting thousands of enterprise, government and service provider networks from cyber-threats, and it boasted staggering year-over-year billing growth.

Unlike fragmented legacy products, the Palo Alto Networks security platform safely enables business operations and delivers protection based on what matters most in today’s dynamic computing environments: applications, users and content. The platform has new features that were introduced to help security professionals overcome the distractions and time spent on problems caused by the overwhelming volume of alerts and manual processes associated with operating many discrete security products, and, instead, expand breach prevention capabilities and boost operational efficiency.

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The company continues to be ranked the highest with the Wildfire product, which has been the favorite in the APT space among the value added resellers who carry and sell the product. Toss in solid upside in billing potential for 2016 and 2017, and the story is a killer going forward. Many analysts on Wall Street have made it clear that the feedback they get from the professionals at security conferences is the most bullish on Palo Alto, and the company is gaining real traction with larger data centers’ firewalls.

A few analysts weighed in on Palo Alto prior to the earnings release:

Pacific Crest reiterated a Buy rating.
Nomura reiterated a Buy rating with a $200 price target.
Piper Jaffray has an Overweight rating with a $180 price target.
Wunderlich has a Buy rating with a $190 price target.
Morgan Stanley reiterated an Overweight rating with a $185 price target.
Oppenheimer reiterated a Buy rating with a $177 price target.

So far in 2016, Palo Alto has underperformed the broad markets, with the stock down 17%. Over the past 52 weeks, the stock is still down 9%.

Shares of Palo Alto Networks were last seen trading at $145.12, with a consensus analyst price target of $195.79 and a 52-week trading range of $111.09 to $200.55.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.