PANW Stock: Cyber Security Firm Palo Alto Earnings Top Estimates on Cloud Growth
Parts in Palo Alto Networks ( PANW ) climbed Wednesday after the cybersecurity firm’s third-quarter earnings topped Wall Street targets while revenue met views. Large customer growth for cloud-based services was a bright spot for the PANW share in the April quarter.
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Palo Alto earnings for the quarter ended April 30 rose 83% to $1.10 on an adjusted basis. Furthermore, PANW stock revenue increased 24% to $1.72 billion, including acquisitions.
Analysts expected earnings of 93 cents a share on sales of $1.72 billion.
Billings, a sales growth gauge, rose 26% to $2.3 billion, beating estimates of $2.228 billion.
Great customer growth bright spot
“The company’s strategy continues to drive significant large deal activity, including deals over $10 million growing 136% over the prior quarter, deals greater than $5 million growing 62% and deals greater than $1 million growing 29%,” William Blair analyst Jonathan Ho said in a report. He added, “There continues to be a tailwind of customers consolidating purchases into Palo Alto’s suite of solutions.”
With roots in the “firewall” network security market, Palo Alto has built a broad cloud-based security platform. Firewall devices protect computer networks by blocking web intrusions and monitoring web-based apps. Acquisitions have been a big part of Palo Alto’s strategy.
Also in the April quarter, annual recurring revenue from cloud platform products increased 60% to $2.57 billion. That topped PANW equities analysts’ estimates of $2.51 billion.
PANW Stock: Earnings Outlook on Views
For the current quarter ending in July, the Palo Alto cybersecurity firm forecast earnings of $1.28 per share on revenue of $1.95 billion at the midpoint of its outlook. Meanwhile, analysts had estimated a profit of $1.20 per share on revenue of $1.95 billion.
PANW shares rose 4.7% to 198.65 in early trading on the stock market today. Palo Alto posted results after the market closed on Tuesday.
Palo Alto stock had risen 36% for 2023 through Tuesday’s close. It is trading in a five-week flat base with a buy point of 203.54.
It also has a relative strength rating of 88 out of a best possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cyber security and cloud computing.
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