PANW Earnings: Palo Alto Networks declines despite beating expectations

Shares of cybersecurity company Palo Alto Networks (NASDAQ:BANU) in after-hours trading after the company reported its earnings for the third quarter of fiscal 2024. Earnings per share were $1.32, which beat analysts’ consensus estimates of $1.25 per share. Sales rose 15.1% year over year, with revenue reaching $1.98 billion. This exceeds analysts’ expectations of $1.967 billion.

Looking ahead, management now expects fourth-quarter 2024 revenue and adjusted earnings per share to range between $2.15 billion to $2.17 billion and $1.40 to $1.42, respectively. For reference, analysts were expecting revenue of $2.16 billion plus adjusted EPS of $1.41.

For fiscal year 2024, revenue is expected to be between $7.99 billion and $8.01 billion compared to estimates of $8 billion. Furthermore, the company expects EPS to range from $5.56 to $5.58 versus expectations of $5.52 per share.

Palo Alto’s disappointing Q4 guidance likely drove its after-hours decline, as it doesn’t do much to justify its current price-to-earnings ratio of 49.7x.

What is the target price for PANW?

Turning to Wall Street, analysts have an average rating of Buy on PANW shares based on 28 Buys, 10 Holds and zero designated Sells in the past three months, as shown in the chart below. With its stock price up 67% over the past year, PANW’s average price target of $335.54 per share suggests a potential upside of 4.6% from today’s closing price. However, it should be noted that estimates will change after today’s earnings report.

Is it wise to allocate $1,000 to PANW stock now?

Before you rush to invest in PANW, consider the following:

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