Cybersecurity company Palo Alto Networks (PANW) is set to announce its fiscal Q4 2024 results on August 19. Wall Street analysts expect the company to report earnings of $1.41 per share for Q4, down 2% from the year-ago quarter. However, analysts expect revenues of $2.16 billion, up $11% year-over-year.
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Although analysts anticipate a decline in Q4 earnings compared to the same quarter last year, it’s worth noting that PANW has a strong track record of exceeding earnings expectations. The company has surpassed earnings estimates in each of the last nine quarters, as shown below.
Insights from TipRanks’ Bulls & Bears Tool
According to TipRanks’ Bulls Say, Bears Say tool, bulls emphasize that PANW’s platform strategy is gaining traction, with longer contract durations and increased customer adoption of integrated solutions. They also point out the company’s expanded cybersecurity offerings across Network Security, Cloud Security, and Security Operations, and are encouraged by its robust free cash flow generation.
Conversely, bears highlight that PANW’s billings are under pressure and expect revenue growth to decelerate, mainly due to challenges in the firewall market and declining hardware sales. They also anticipate continued stock volatility due to estimate revisions and revenue fluctuations.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting an 11.34% move in either direction.
Is Palo Alto Networks a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on PANW stock based on 32 Buy and seven Sells assigned in the past three months, as indicated by the graphic below. After a 15% gain in its share price over the past year, the analysts’ average price target on PANW stock of $346.37 implies upside potential of 1.90%.
