Cybersecurity solutions provider Palo Alto Networks (PANW) is scheduled to announce its results for the first quarter of Fiscal 2025 after the market closes on November 20. PANW shares have rallied 31% year-to-date, reflecting optimism about the company’s product offerings amid the continued shift to the cloud and the ongoing artificial intelligence (AI) wave. Coming to Q1 FY25, analysts expect Palo Alto’s adjusted EPS (earnings per share) to increase over 7% year-over-year to $1.48 and revenue to rise about 13% to $2.12 billion.
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It is worth noting that Palo Alto has a very strong track record of beating market expectations and has surpassed earnings estimates in each of the four quarters of the past three Fiscal Years.
Palo Alto is pursuing a “Platformization Strategy,” under which it is bundling the company’s products and services. The company expects this strategy to drive consolidation and boost its business, as customers can buy all or most of their cybersecurity products from a single provider like Palo Alto.
Buzz Ahead of PANW’s Q1 Earnings
Ahead of the Q1 results, Jefferies analyst Joseph Gallo increased the price target for Palo Alto Networks stock to $450 from $400 and reiterated a Buy rating on the stock. Gallo expects the company to report healthy Q1 results, with a slight upside to the 19% to 20% remaining performance obligation (RPO) growth guidance.
While Gallo does not expect material upside to RPO in Fiscal 2025, he remains confident about Palo Alto’s long-term consolidation strategy delivering robust free cash flow.
Likewise, Truist analyst Joel Fishbein increased the price target for PANW stock to $425 from $400 and maintained a Buy rating as part of a broader research note on the upcoming Q3 results of the Infrastructure and Security Software group. Fishbein stated that discussions with customers and partners indicated that Palo Alto Networks is ahead of its quarterly plan due to strong demand for vendor consolidation from customers.
Options Traders Anticipate a Major Move
TipRanks’ Options tool offers a quick way to gauge what options traders anticipate from the stock following its earnings report. The expected earnings move is calculated using the at-the-money straddle of the options set to expire closest to the announcement. While this may sound complex, the tool handles the calculations for you.
Currently, it indicates that options traders are predicting about an 8.02% swing in either direction in PANW stock.
Is PANW a Buy, Sell, or Hold?
Wall Street is highly bullish on Palo Alto stock, with a Strong Buy consensus rating based on 33 Buys and six Holds. The average PANW stock price target of $399.33 indicates a modest upside potential of 3.23%.
