Palo Alto Networks Inc. shares are basking within the final reduction rally Monday after the corporate’s Friday evening earnings scare proved a fakeout.
Shares of the cybersecurity firm had bought off by 18% between when the corporate introduced it could be reporting outcomes on Friday evening and when it really delivered these outcomes. While traders have been fearing the worst given the unusual timing, Palo Alto Networks’
PANW,
outcomes and outlook ended up being high-quality.
Read: Palo Alto Networks CEO addresses Friday earnings experiment: ‘Lesson learnt’
The inventory is forward 15.7% in Monday morning motion and on monitor for its largest single-day share acquire in about two years as Wall Street unpacks the corporate’s new targets.
“Overall the call reinforced our view that Palo Alto remains in a great position to consolidate enterprise security spend and in turn, remains a great way to invest in security at the platform level with expanding margins,” RBC Capital Markets analyst Matthew Hedberg wrote in a word to shoppers.
He sees “upward bias” to Palo Alto Networks’ outlook for metrics like billing and free money circulate looking forward to fiscal 2024 and financial 2026.
He charges the inventory at outperform and lifted his worth goal to $281 from $250.
Wolfe Research’s Joshua Tilton commented that “the only real negative from the surprise [fourth-quarter] earnings event was indeed the Friday night timing.”
He wrote: “At the end of the day, the timing of the event sent investor sentiment to an all-time tactical low heading into the print, yet results were better than feared and there was no catastrophic news. Our thesis that [Palo Alto] is the best brand in the security market with the most relevant products to sell into a large base of [chief information security officers] remains unchanged, we see room for upside to current [fiscal 2026] targets, and we are glad we kept our season tickets.”
He famous that bears would possibly decide at administration’s commentary that extra clients need deferred cost phrases, however the firm “accounted for this in the guide for [fiscal 2024 free cash flow], which at 37.5% was in line with consensus and ahead of what investors had lowered their expectations to heading into the print.”
He has an outperform score and a $255 goal worth on the inventory.
UBS analyst Roger Boyd, in the meantime, was extra cautious.
“After weeks of consternation, the [fiscal fourth-quarter] earnings and analyst day went much better than many had feared, but we are remaining Neutral on shares with a view that new estimates leave limited room for expansion,” he wrote.
The forecasts for fiscal 2024 and 2026 “were better than expected but neither look that conservative, calling for zero deceleration on the top-line metrics,” he wrote, whereas the prior three-year steering referred to as for five share factors of deceleration, “even as the hardware firewall business shrinks to less than 10% of revenue.”
Though he stayed on the sidelines, Boyd boosted his worth goal on Palo Alto Networks shares to $260 from $220.
Source web site: www.marketwatch.com
