Palo Alto Networks Lifts FY21 Outlook Above Street; Shares Gain 4.6%

Shares of Palo Alto Networks advanced about 4.6% in Monday’s pre-market session after the cybersecurity company raised its fiscal 2021 outlook above the Street consensus. Palo Alto also surprised the Street with a blowout 1Q performance.

Palo Alto’s (PANW) 1Q earnings of $1.62 per share jumped 54.3% year-over-year and beat the consensus estimates of $1.33. Its revenues grew 23% from the year-ago quarter to $946 million and topped analysts’ expectations of $921.6 million. The company delivered 1Q billings growth of 21% year-over-year.

As for 2Q, the company expects earnings in the range of $1.42-$1.44 per share, which is above the $1.35 per share analysts had estimated. Palo Alto anticipates 2Q revenues in the range of $975 million-990 million, exceeding analysts’ projections of $970.96 million.

Palo Alto raised its fiscal 2021 profit outlook to a range of $5.70-$5.80, beating the consensus estimates of $5.60. Previously, the company anticipated fiscal 2021 earnings to grow in low to mid-teens range. Palo Alto lifted its revenue guidance to a range of $4.09-4.14 billion. Previously, it had predicted sales to grow in high teens range. Analysts were looking for $4.02 billion for fiscal 2021. (See PANW stock analysis on TipRanks).

On Nov. 12, Robert W. Baird analyst Jonathan Ruykhaver maintained a Buy rating on the stock with a price target of $295 (14% upside potential). The analyst said that he liked the company’s recent acquisition of Expanse and appreciates “management’s continued commitment to broadening the product portfolio.” He further believes that “PANW has the right strategic vision and that the investments it is making in Prisma and Cortex position the company for better long-term growth than legacy firewall peers.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 21 Buys and 6 Holds. The average price target stands at $297.81 implying upside potential of about 15.1% to current levels. Shares are up about 11.9% year-to-date.