How Analysts View Palo Alto Networks After Earnings

By Chris Lange Updated Jan 12, 2:21PM EST · Published Mar 1, 1:30PM EST

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How Analysts View Palo Alto Networks After Earnings — © Thinkstock

[cnxvideo id=”625494″ placement=”ros”]Palo Alto Networks Inc. (NYSE: PANW) reported its fiscal second-quarter financial results after the markets closed on Tuesday. Looking at the results, they were not incredibly good and the third-quarter outlook was even worse. In the quote from the CEO, Mark McLaughlin, the “execution challenges” he referred to did not help the company’s growth story, and the outlook does not inspire a lot of confidence in continued growth either.

24/7 Wall St. has included some highlights from the report, as well as what some analysts are saying after looking at the results.

The company posted $0.63 in earnings per share (EPS) on revenues of $422.6 million. The consensus estimates from Thomson Reuters had called for $0.62 in EPS and $429.72 million in revenue. In the same period a year ago, the network security company reported EPS of $0.43 on revenue of $334.7 million.

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The company forecast fiscal third-quarter revenue in a range of $406 million to $416 million, a year-over-year gain of 17% to 20%. Diluted, adjusted EPS is pegged at a range of $0.54 to $0.56, including a $0.04 per share investment in the acquisition of LightCyber, which Palo Alto Networks also announced Tuesday. Consensus estimates for the fiscal third quarter call for EPS of $0.70 on revenues of $454.63 million.

A few analysts weighed in on the stock:

Imperial Capital dropped its price target to $137 from $180.

Stifel Nicolaus lowered its price target to $170.

Morgan Stanley downgraded the stock to Equal Weight.

Maxim Group maintained its Buy rating and lowered its price target to $168 from $185.

Deutsche Bank lowered its price target to $125.

Wunderlich downgraded it to a Hold from Buy with a $150 price target.

RBC Capital Markets lowered its price target to $140.

Jefferies lowered its price target to $130.

First Analysis downgraded it to Equal Weight from Overweight and lowered its target to $120 from $175.

William Blair downgraded it to a Market Perform rating from Outperform.

JMP Securities lowered its price target to $155.

BTIG lowered its price target to $155.

JPMorgan downgraded it to Neutral from Overweight and lowered its target from $170 to $140.

Baird downgraded it to Neutral from Outperform and lowered its price target to $130 from $175.

Shares of Palo Alto were trading down 22% at $117.87 on Wednesday, with a consensus analyst price target of $172.37 and a 52-week trading range of $114.64 to $165.69.

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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.