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Palo Alto Networks shares set to soar following big earnings win

Palo Alto Networks [PANW] surged in premarket trading today and is now trading up close to 4% following an impressive earnings beat yesterday.

The cybersecurity firm beat expectations for earnings and revenue, while also providing a bullish outlook for 2022.

Let’s take a look at some of the details.

This article was originally written by MyWallSt. Read more insights from the MyWallSt team here.

What does Palo Alto Networks do?

Palo Alto Networks is a California-based cybersecurity company. Its core products revolve around firewalls and cloud-based security offerings. Operating in over 150 countries worldwide, Palo Alto Networks is at the forefront of cloud security. 

It has made a number of savvy acquisitions across the industry over the past three years, with 10 companies being purchased for a total of roughly $3.4bn. With these companies now finally fully integrated within Palo Alto Networks’ platform, investors are eager to see the investments bear fruit.

How did Palo Alto Networks earnings go?

Palo Alto Networks posted earnings per share (EPS) of $1.74 on revenue of $1.31bn. These figures outpaced analyst estimates of $1.65 per share and $1.26bn, while representing growth of 12% and 30% respectively. CEO Nikesh Arora explained that the company,

“continued to benefit from strength across our three security platforms, driven by strong cybersecurity demand, organizations architecting for hybrid work and growing their hyperscale cloud footprints.”

Building on this solid growth, the firm also outlined strong guidance for the year ahead. Billings, revenue, and EPS all saw their outlook raised for the coming year, with strong growth expected. 

So, should I buy Palo Alto Networks stock?

Palo Alto Networks could represent a strong way to introduce some cloud-based diversity to your portfolio. The company has shown solid growth over the past number of quarters and is set to be one of the major beneficiaries of the worldwide move to more remote-based work.

Following a string of acquisitions, the business is now confident that it has extended itself into many important areas in cybersecurity that it had identified as “up-and-coming”. With no further acquisitions in the past year, and the company starting in August that it had no further plans to purchase, it seems that that phase of rapid expansion is now over. 

As Arora stated, “this quarter marks the end of all integrations of our acquired businesses over the last few years.” With its platform now fully built out, Palo Alto Networks can double down on growing its user base and continuing to drive recurring revenue.

Having only made its debut on the Nasdaq 100 index in December, Palo Alto Networks appears to be living up to its billing. With strong growth in the books and ample opportunity to continue expanding, it looks like a relatively solid portfolio addition for the coming few years.

 

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Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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