These 6 Palo Alto Networks Analysts Are Happy With FQ2 Print

Shares of Palo Alto Networks Inc PANW jumped in Wednesday’s premarket session, after the company reported quarterly earnings.

KeyBanc Capital Markets analyst Michael Turits reaffirmed an Outperform rating, while raising the price target from $210 to $230.
Guggenheim Securities analyst John DiFucci maintained a Neutral rating on the stock.
JMP Securities analyst Trevor Walsh reiterated a Market Outperform rating, while raising the price target from $208 to $230.
BMO Capital Markets analyst Keith Bachman reiterated an Outperform rating, while raising the price target from $220 to $228.
Oppenheimer analyst Ittai Kidron reiterated an Outperform rating and price target of $220.
Raymond James analyst Adam Tindle maintained an Outperform rating and price target of $215.

The company delivered a strong billings beat and fiscal 2023 billings raise, Turits said in a note. “Management noted strong execution amid a tougher macro, and strength in large deals and in both product and NGS solutions that drove billings/RPO upside,” he added.
“We see strong drivers for Palo's next-gen (software/cloud) products, and Palo's position as a consolidator of both on-prem and cloud security better insulating from both macro and the slowing of hardware growth from >20% back to LT rates,” the analyst further stated.

Palo Alto Networks reported a strong quarter "with better results across the board on both the top and bottom lines, with guidance also better than consensus” and solid guidance, DiFucci said.
“While commentary may suggest conservatism from deals being pushed driven by macro forces, it also introduces risk in our view if deals also push out of 4Q given the same dynamics,” he added.

“Palo Alto Networks continues to perform ahead of consensus expectations while maintaining a profitable growth profile,” Walsh said.
“We increase our FY23 non-GAAP EPS estimate to $4.01 from $3.44 (consensus $3.42) on revenue growth of 26% and increase our FY24 non-GAAP EPS estimate to $4.35 from $3.82 (consensus $4.05) on revenue growth of 24%,” he added.

“Consistent with our security preview, PANW acknowledged a slowdown in the firewall market,” Bachman said in a note. “Hence, FY23 revenue guidance remains consistent, though FY23 billings guidance is moving modestly higher, driven by PANW’s software portfolio,” he added.
“Importantly, both operating and FCF margin FY23 guidance are moving meaningfully higher,” the analyst further stated.

Palo Alto Networks delivered solid results on “broad-based demand, growing cross-platform adoption, and healthy deal activity,” Kidron wrote in a note.
“Other highlights include strong Next-Gen security ARR growth (+63% YoY to $2.33B), and strong multi-module adoption for Prisma Cloud customers,” he added.

“We do not think Palo is immune to macro slowdowns, but firewall supply improvements alongside its platform consolidation selling motion that is skewed towards software is providing insulation,” Tindle said.
“Large deals landed, and the size of those deals, keep showing momentum while operating leverage is showing in the model,” the analysts wrote. “We think becoming more than a firewall vendor is amplifying its criticality to customers, and SASE deals being >2.5x larger than firewall and the early days of XSIAM potentially replacing a ripe-for-replacement SIEM market, can create durable growth."

PANW Price Action: Shares of Palo Alto Networks jumped 9.23% to $182.30 during the premarket session on Wednesday.