Palo Alto Networks (PANW) Reports Q1: Everything You Need To Know Ahead Of Earnings

Petr Huřťák /
2022/11/16 4:28 am EST

Cybersecurity provider Palo Alto Networks (NASDAQ:PANW) will be reporting results tomorrow after market close. Here's what to look for.

Last quarter Palo Alto Networks reported revenues of $1.55 billion, up 27.1% year on year, in line with analyst expectations. It was a decent quarter for the company, with a full year guidance beating analysts' expectations.

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 24.2% year on year to $1.55 billion, slowing down from the 31.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.69 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 has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.5%.

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 19.6% year on year, beating analyst estimates by 0.8% and Rapid7 reported revenues up 25.6% year on year, missing analyst estimates by 0.12%. Qualys traded down 6.59% on the results, Rapid7 was down 5.34%. Read our full analysis of Qualys's results here and Rapid7's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 11.7% over the last month. Palo Alto Networks is up 2.77% during the same time, and is heading into the earnings with analyst price target of $215.2, compared to share price of $162.13.

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.

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