Palo Alto Networks Guides Lower for Q3 Despite Strong Q2 Earnings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 13 2025
0mins
Should l Buy PANW?
Source: Business Insider
Palo Alto Networks' stock is down 6.73% in pre-market trading, hitting a 5-day low, following the release of its Q2 earnings report.
The company reported earnings per share of $1.03, exceeding expectations, but provided disappointing guidance for Q3, forecasting earnings between $0.78 and $0.80, below the $0.92 estimate. This has raised concerns about future growth, contributing to the stock's decline despite a strong performance in the cybersecurity sector and a recent $25 billion acquisition of CyberArk.
The market reaction reflects investor caution regarding Palo Alto's growth trajectory, even as the company continues to expand its capabilities through strategic acquisitions and strong revenue growth.
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Analyst Views on PANW
Wall Street analysts forecast PANW stock price to rise
34 Analyst Rating
28 Buy
5 Hold
1 Sell
Strong Buy
Current: 163.500
Low
157.00
Averages
232.49
High
265.00
Current: 163.500
Low
157.00
Averages
232.49
High
265.00
About PANW
Palo Alto Networks, Inc. provides comprehensive artificial intelligence (AI)-powered security solutions across network, cloud, security operations and AI. The Company focuses on four areas: Network Security, Cloud Security, Security Operations and Threat Intelligence and Advisory Services (Unit 42). Its network security platform comprises ML-powered firewalls, AI Runtime Security, and a Secure Access Service Edge (SASE) framework, which includes Prisma Access, Prisma SD-WAN, and Prisma Access Browser to secure remote workforces and branch offices. Its Cloud security is delivered via Prisma Cloud, a Code to Cloud platform that protects applications, data, GenAI environments, and the cloud-native stack throughout the development lifecycle. Its Unit 42 division provides intelligence-led consulting, incident response, managed detection and response, and threat hunting services. Its Prisma AIRS is an AI security platform which secures applications, agents, models and data.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Palo Alto Releases Earnings Amid Changing Cyber Threat Environment
- Earnings Report: Palo Alto Networks is set to release its second-quarter earnings report on Tuesday afternoon.
- AI Disruption: The company is also focusing on the impact of artificial intelligence on various industries, indicating a strategic shift in their approach.
See More
Palo Alto Networks to Release Q2 Earnings Results
- Earnings Expectations: Palo Alto Networks is set to release its Q2 earnings report after the market close on February 17, with analysts forecasting earnings of $0.94 per share, an increase from $0.81 per share in the same quarter last year, indicating ongoing improvement in profitability.
- Revenue Growth: The company is expected to report quarterly revenue of $2.58 billion, up 14.2% from $2.26 billion a year earlier, reflecting strong demand and an increase in market share within the cybersecurity sector.
- Acquisition Completion: On February 11, Palo Alto Networks announced the completion of its acquisition of CyberArk for $45 per share in cash plus 2.2005 shares of Palo Alto stock, which will enhance its product offerings and competitive positioning in the market.
- Stock Performance: Following the latest news, Palo Alto's stock rose by 2.6% to close at $166.95, indicating positive market sentiment regarding the company's growth potential moving forward.
See More
US Stocks Close Higher on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, exceeding expectations of 0.3%, indicating a rebound in capital spending that boosts market confidence and drives stock prices higher.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly surpassing the expected 1.304 million, suggesting a recovery in the housing market that could stimulate investment and consumption in related sectors.
- Manufacturing Production Growth: January manufacturing production rose by 0.6% month-over-month, stronger than the expected 0.4%, marking the largest increase in 11 months, indicating a recovery in manufacturing that supports overall economic growth expectations.
- Optimistic Stock Market Performance: Over 75% of S&P 500 companies reported earnings that beat expectations, with Q4 earnings growth projected at 8.4%, providing strong support for the stock market despite lingering doubts about future interest rate policies.
See More
Palo Alto Networks Stock Faces Significant Pullback
- Earnings Beat Expectations: Palo Alto Networks reported an adjusted profit of $1.03 per share on sales of $2.59 billion, exceeding Wall Street's targets, indicating robust growth in the cybersecurity sector.
- Negative Market Reaction: Despite strong sales and earnings figures, investor disappointment with management's forward guidance led to a 6.8% drop in stock price on Wednesday, with intraday losses reaching 10%, reflecting concerns over future profitability.
- Poor Future Outlook: The company projects adjusted earnings per share between $0.78 and $0.80 for the next quarter, significantly below the analyst estimate of $0.92, although sales are expected to range between $2.941 billion and $2.945 billion, surpassing the previous target of $2.6 billion.
- Full-Year Guidance Below Expectations: Palo Alto anticipates adjusted earnings between $3.65 and $3.70 per share on sales between $11.28 billion and $11.31 billion, both falling short of analyst expectations of $3.85 and $10.5 billion, prompting investors to reassess the long-term earnings outlook.
See More
Palo Alto Networks Reports Strong Sales but Weak Earnings Guidance
- Strong Earnings Report: Palo Alto Networks reported adjusted earnings of $1.03 per share and sales of $2.59 billion for fiscal Q2 2023, surpassing Wall Street's expectations of $0.94 per share and $2.58 billion, indicating robust performance in the cybersecurity sector.
- Sales Growth: The company's next-generation security segment saw a 33% year-over-year sales increase, reaching $6.3 billion, which pushed overall revenue up 14.6% year-over-year; however, management's guidance suggests potential margin softening, which may impact investor confidence.
- Guidance Miss: For the current quarter, Palo Alto expects adjusted earnings per share between $0.78 and $0.80, significantly below the analyst estimate of $0.92, although sales projections of $2.941 billion to $2.945 billion exceed the previous target of $2.6 billion, highlighting a mixed outlook.
- Long-Term Outlook Reevaluation: The company anticipates full-year adjusted earnings between $3.65 and $3.70 per share on sales of $11.28 billion to $11.31 billion, both below analyst expectations of $3.85 and $10.5 billion, prompting investors to reassess the long-term earnings outlook.
See More
Palo Alto Networks Stock Takes Significant Hit
- Stock Pullback: Despite bullish market momentum, Palo Alto Networks' stock fell 6.8% on Wednesday, with a peak decline of 10%, indicating investor dissatisfaction with the company's future outlook.
- Earnings Beat: The company reported fourth-quarter results with adjusted earnings of $1.03 per share and sales of $2.59 billion, both exceeding Wall Street expectations; however, management's forward guidance failed to satisfy investors.
- Weak Forward Guidance: For the current quarter, Palo Alto expects adjusted earnings per share between $0.78 and $0.80, significantly below the analyst consensus of $0.92, although sales projections of $2.941 billion to $2.945 billion are well above the previous target of $2.6 billion.
- Long-Term Outlook Deterioration: The company anticipates full-year adjusted earnings between $3.65 and $3.70 per share on sales of $11.28 billion to $11.31 billion, both falling short of analyst estimates of $3.85 and $10.5 billion, prompting investors to reassess the long-term earnings outlook.
See More
Palo Alto Releases Earnings Amid Changing Cyber Threat Environment
- Earnings Report: Palo Alto Networks is set to release its second-quarter earnings report on Tuesday afternoon.
- AI Disruption: The company is also focusing on the impact of artificial intelligence on various industries, indicating a strategic shift in their approach.
See More
Palo Alto Networks to Release Q2 Earnings Results
- Earnings Expectations: Palo Alto Networks is set to release its Q2 earnings report after the market close on February 17, with analysts forecasting earnings of $0.94 per share, an increase from $0.81 per share in the same quarter last year, indicating ongoing improvement in profitability.
- Revenue Growth: The company is expected to report quarterly revenue of $2.58 billion, up 14.2% from $2.26 billion a year earlier, reflecting strong demand and an increase in market share within the cybersecurity sector.
- Acquisition Completion: On February 11, Palo Alto Networks announced the completion of its acquisition of CyberArk for $45 per share in cash plus 2.2005 shares of Palo Alto stock, which will enhance its product offerings and competitive positioning in the market.
- Stock Performance: Following the latest news, Palo Alto's stock rose by 2.6% to close at $166.95, indicating positive market sentiment regarding the company's growth potential moving forward.
See More
US Stocks Close Higher on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, exceeding expectations of 0.3%, indicating a rebound in capital spending that boosts market confidence and drives stock prices higher.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly surpassing the expected 1.304 million, suggesting a recovery in the housing market that could stimulate investment and consumption in related sectors.
- Manufacturing Production Growth: January manufacturing production rose by 0.6% month-over-month, stronger than the expected 0.4%, marking the largest increase in 11 months, indicating a recovery in manufacturing that supports overall economic growth expectations.
- Optimistic Stock Market Performance: Over 75% of S&P 500 companies reported earnings that beat expectations, with Q4 earnings growth projected at 8.4%, providing strong support for the stock market despite lingering doubts about future interest rate policies.
See More
Palo Alto Networks Stock Faces Significant Pullback
- Earnings Beat Expectations: Palo Alto Networks reported an adjusted profit of $1.03 per share on sales of $2.59 billion, exceeding Wall Street's targets, indicating robust growth in the cybersecurity sector.
- Negative Market Reaction: Despite strong sales and earnings figures, investor disappointment with management's forward guidance led to a 6.8% drop in stock price on Wednesday, with intraday losses reaching 10%, reflecting concerns over future profitability.
- Poor Future Outlook: The company projects adjusted earnings per share between $0.78 and $0.80 for the next quarter, significantly below the analyst estimate of $0.92, although sales are expected to range between $2.941 billion and $2.945 billion, surpassing the previous target of $2.6 billion.
- Full-Year Guidance Below Expectations: Palo Alto anticipates adjusted earnings between $3.65 and $3.70 per share on sales between $11.28 billion and $11.31 billion, both falling short of analyst expectations of $3.85 and $10.5 billion, prompting investors to reassess the long-term earnings outlook.
See More
Palo Alto Networks Reports Strong Sales but Weak Earnings Guidance
- Strong Earnings Report: Palo Alto Networks reported adjusted earnings of $1.03 per share and sales of $2.59 billion for fiscal Q2 2023, surpassing Wall Street's expectations of $0.94 per share and $2.58 billion, indicating robust performance in the cybersecurity sector.
- Sales Growth: The company's next-generation security segment saw a 33% year-over-year sales increase, reaching $6.3 billion, which pushed overall revenue up 14.6% year-over-year; however, management's guidance suggests potential margin softening, which may impact investor confidence.
- Guidance Miss: For the current quarter, Palo Alto expects adjusted earnings per share between $0.78 and $0.80, significantly below the analyst estimate of $0.92, although sales projections of $2.941 billion to $2.945 billion exceed the previous target of $2.6 billion, highlighting a mixed outlook.
- Long-Term Outlook Reevaluation: The company anticipates full-year adjusted earnings between $3.65 and $3.70 per share on sales of $11.28 billion to $11.31 billion, both below analyst expectations of $3.85 and $10.5 billion, prompting investors to reassess the long-term earnings outlook.
See More
Palo Alto Networks Stock Takes Significant Hit
- Stock Pullback: Despite bullish market momentum, Palo Alto Networks' stock fell 6.8% on Wednesday, with a peak decline of 10%, indicating investor dissatisfaction with the company's future outlook.
- Earnings Beat: The company reported fourth-quarter results with adjusted earnings of $1.03 per share and sales of $2.59 billion, both exceeding Wall Street expectations; however, management's forward guidance failed to satisfy investors.
- Weak Forward Guidance: For the current quarter, Palo Alto expects adjusted earnings per share between $0.78 and $0.80, significantly below the analyst consensus of $0.92, although sales projections of $2.941 billion to $2.945 billion are well above the previous target of $2.6 billion.
- Long-Term Outlook Deterioration: The company anticipates full-year adjusted earnings between $3.65 and $3.70 per share on sales of $11.28 billion to $11.31 billion, both falling short of analyst estimates of $3.85 and $10.5 billion, prompting investors to reassess the long-term earnings outlook.
See More
