PANW Earnings: Palo Alto Networks Sinks despite Beating Expectations

Shares of cybersecurity company Palo Alto Networks (NASDAQ:PANW) sank in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2024. Earnings per share came in at $1.32, which beat analysts’ consensus estimate of $1.25 per share. Sales increased by 15.1% year-over-year, with revenue hitting $1.98 billion. This beat analysts’ expectations of $1.967 billion.

Looking forward, management now expects revenue and adjusted earnings per share for Q4 2024 to be in the ranges of $2.15 billion to $2.17 billion and $1.40 to $1.42, respectively. For reference, analysts were expecting $2.16 billion in revenue along with an adjusted EPS of $1.41.

For Fiscal Year 2024, revenue is expected to land between $7.99 billion and $8.01 billion compared to estimates of $8 billion. Furthermore, the firm anticipates earnings per share of $5.56 to $5.58 versus expectations of $5.52 per share.

Palo Alto’s underwhelming Q4 guidance is likely what led to its after-hours plunge, as it does little to justify its current price-to-earnings ratio of 49.7x.

What Is the Price Target for PANW?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on PANW stock based on 28 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 67% rally in its share price over the past year, the average PANW price target of $335.54 per share implies 4.6% upside potential from today’s closing price. However, it’s worth noting that estimates will change following today’s earnings report.

Is It Wise to Allocate $1,000 Toward PANW Stock Right Now? 

Before you hurry to invest in PANW, think about the following: 

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