Palo Alto Networks (NASDAQ: $PANW) released its fourth quarter fiscal 2024 results on Monday evening to a positive market reception.
Palo Alto Networks Surpasses Estimates
It reported an EPS of $1.51 for the fourth quarter. It beat estimates of $1.41 and the $1.44 reported the previous year. Revenue grew 12% YoY to $2.2 billion, beating estimates of $2.16 billion.
For the full year, Palo Alto Networks revenue grew 16% to $8 billion. Meanwhile, FY24 non-GAAP net income increased 27.7% to $5.67.
Positive Outlook
For the first quarter of fiscal 2025, Palo Alto Networks expects revenue of $2.10 to $2.13 billion, a YoY increase of 12% to 13%. It expects a non-GAAP EPS of $1.47 to $1.49.
The company expects revenue for the full year to come in at $9.10 to $9.15 billion, a 13% to 14% increase. It expects a non-GAAP net income of $6.18 to $6.31 for the year, a 9% to 11% YoY increase.
The revenue and EPS estimates for the upcoming quarter and full year are above analysts’ estimates. For the current quarter, analysts expect an EPS of $1.44 and revenue of $2.11 billion, while for the full year, they expect an EPS of $6.20 and revenue of $9.11 billion.
Palo Alto Networks Business Strategy Pays Off
During the earnings call, CEO Nikesh Arora highlighted the benefits the company had gotten from its change in business strategy. At the top of this transformation was platformization, their cloud security platform effort. He noted that his only regret from making the change six months ago is that they did not do it sooner.
He noted that after adding 65 new platformizations in Q3, the number grew to over 90 in Q4. According to him, they have over 1000 platformizations amongst their 5000 largest customers as of the end of FY24.
The CEO also commented on the recent CrowdStrike outage. He noted that the event had given them visibility in the cybersecurity market, which they would otherwise not have had. According to him, it was
“Helpful for our sales team, and I think we can build on that, coupled with our XIM capability and opportunities.”
PANW Stock Performance
PANW stock closed trading on Monday, August 19, 2.77% higher at $343.36 per share, anticipating positive Q4 results. Following the release of the results, the stock has climbed another 2.30% to $351.37 in pre-market trading.
The stock has gained 18.84%, and over the past 12 months, it has gained 42.59%. Its current price is above the 50 and 200 DMA of $326.05 and $304.94, respectively. These gains can partly be explained by the CrowdStrike debacle, with Palo Alto Networks expected to take some market share from the company.
Is Palo Alto Networks A Buy?
Wall Street remains bullish on the future of PANW stock. The stock has 40 buys, 15 holds, and zero sell ratings. Its solid future projections make it a lucrative option for investors. Additionally, it is expected to benefit from the CrowdStrike fallout in upcoming quarters incrementally.
Based on the success of its cloud security platform and the ongoing gain of CrowdStrike’s market share, PAWN could potentially be a lucrative investment. Additionally, the company surpassed revenue and earnings forecasts for the upcoming quarter.
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