Palo Alto Networks (PANW) Q1 Earnings: What To Expect

Jabin Bastian /
2023/11/14 2:01 am EST

Cybersecurity provider Palo Alto Networks (NASDAQ:PANW) will be announcing earnings results tomorrow after the bell. Here's what investors should know.

Last quarter Palo Alto Networks reported revenues of $1.95 billion, up 26% year on year, missing analyst expectations by 0.2%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full year.

Is Palo Alto Networks buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Palo Alto Networks's revenue to grow 17.9% year on year to $1.84 billion, slowing down from the 25.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.16 per share.

Palo Alto Networks Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 1.3%.

Looking at Palo Alto Networks's peers in the cybersecurity segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Qualys delivered top-line growth of 13.1% year on year, beating analyst estimates by 0.7% and Rapid7 reported revenues up 13.1% year on year, exceeding estimates by 0.9%. Qualys traded flat on the results, Rapid7 was up 1.9%.

Read our full analysis of Qualys's results here and Rapid7's results here.

Tech stocks have been facing declining investor sentiment since 2022 and while some of the cybersecurity stocks have fared somewhat better, they have not been spared, with share price declining 2.4% over the last month. Palo Alto Networks is down 2.1% during the same time, and is heading into the earnings with analyst price target of $278.1, compared to share price of $256.1.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.