Earnings To Watch: Palo Alto Networks (PANW) Reports Q3 Results Tomorrow

Radek Strnad /
2022/05/18 7:17 am EDT

Cybersecurity provider Palo Alto Networks (NYSE:PANW) will be reporting earnings tomorrow after market close. Here's what investors should know.

Last quarter Palo Alto Networks reported revenues of $1.31 billion, up 29.5% year on year, beating analyst revenue expectations by 2.74%. It was a decent quarter for the company, with a strong top-line growth and revenue guidance for the next quarter above 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 26.5% year on year to $1.36 billion, improving on the 23.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.68 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 3.12%.

Looking at Palo Alto Networks's peers in the cybersecurity segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Tenable delivered top-line growth of 29.3% year on year, beating analyst estimates by 3.82%, and ForgeRock reported revenues up 13.4% year on year, exceeding estimates by 3.35%. Tenable traded down 0.9% on the results, and ForgeRock was flat on the results. Read our full analysis of Tenable's results here and ForgeRock's results here.

The fears around raising interest rates have been putting pressure on tech stocks and software stocks have not been spared, with share price down on average 21.8% over the last month. Palo Alto Networks is down 23.9% during the same time, and is heading into the earnings with analyst price target of $640.5, compared to share price of $473.27.

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.