Palo Alto Networks, Inc. (NASDAQ: PANW) dominates the global cybersecurity industry. The company provides digital security solutions that secure thousands of organizations globally.
It is renowned for its cutting-edge firewalls that detect all threats, including encrypted traffic. The company utilizes intelligence from its global network of deployments to identify threats. Consequently, it mitigates risks and prevents numerous novel and known attacks.
Palo Alto Networks Earnings Report
The company released its earnings report for fiscal Q1 2024 on November 15, 2023. It reported an EPS of $1.38, against the analysts’ prediction of $1.16, a surprise of 18.58%. The reported revenue of $1.88 billion also beat analysts’ estimates of $1.84 billion by 1.87%.
Palo Alto Networks Stock Performance
Despite beating analysts’ estimates for Q1 2024, Palo Alto Networks stock (PANW) continued to slide starting on November 16. At the close of trading, the stock had lost 5.42% of its value and is currently worth $242.30 per share. The slide is due to billing numbers that fell short of analysts’ predictions. Palo Alto Networks reported Q1 2024 billings of $2.02 billion, which was lower than the analysts’ estimate of $2.05-$2.08 billion.
Weak billings may signal that demand for Palo Alto Networks’ solutions is softening. In its outlook, Palo Alto Networks forecast $1.955-$1.985 billion in revenue for the next quarter, which aligns with estimates of $1.97 billion. Its profit forecast for Q2 2024 is $1.29-$1.31 billion, a bit higher than the analysts’ estimate of $1.25 billion.
Before the recent slide, PANW stock’s biggest slide came in July when it lost 7.3% of its value following Microsoft’s announcement of a new range of security products. These security solutions potentially threaten Palo Alto Networks’ cloud and network security solutions.
Microsoft’s solutions are still in testing, and pricing is not out yet. However, analysts believe that Microsoft could introduce major competition in the cybersecurity sector. They already have a massive customer base to which they could cross-sell new security solutions, taking a huge share from existing suppliers.
PANW Stock Forecast
Palo Alto Networks (PANW) stock is up 75.01% year-to-date. Its current price of $242.30 per share is trading close to its 52-week high of $261.74. The stock is also trading close to its 50-day moving average of 244.62 and above its 200-day moving average of $218.52.
Based on its strong performance this year and having come close to or surpassed the 50-day and 200-day moving averages, stock analysts have given the stock a strong buy rating. They give the stock a high price target of $315 and a low of $155 for an average price target of $270.89. The average price target is an 11.80% upside for PANW stock.
Should You Buy PANW Stock?
PANW stock has a strong buy rating from market analysts. Despite the recent drop in billing numbers, the fundamentals remain lucrative. It has consistently beaten EPS estimates 100% of the time in the past four quarters, and its revenue forecasts are solid.
Adding PANW stock to your portfolio could lead to a noticeable bump in value in the next 12 months. However, always weigh your risk carefully and closely monitor any investments you pick in the stock market.
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