Palo Alto Networks Stock Shoots Up After Q4 Print: 5 Analysts Deep Dive Into Why, Outlook

Shares of Palo Alto Networks Inc PANW spiked in early trading on Monday, after the company reported its fiscal fourth-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

RBC Capital Markets On Palo Alto Networks

Analyst Matthew Hedberg maintained an Outperform rating while raising the price target from $250 to $281.

The company’s results were “generally fine,” but the highlight of the earnings call was the “better FY/24 and FY/26 billings, NGS and FCF guidance as we believe an upward bias to expectations exists,” Hedberg said in a note.

“Overall the call reinforced our view that Palo Alto remains in a great position to consolidate enterprise security spend and in turn, remains a great way to invest in security at the platform level with expanding margins,” he added.

Raymond James On Palo Alto Networks

Analyst Adam Tindle reiterated an Outperform rating while lifting the price target from $230 to $250.

Palo Alto Networks’ quarterly results reflected continued profitable growth despite a challenging demand environment, Tindle said.

“Margin improvement is expected to continue despite significant improvement in FY23 (EBIT margin up >500 bp), with a goal of at least 28% in FY26 alongside holding 37% FCF margin,” the analyst wrote. “The business is becoming more recurring (hardware expected to be 10% of sales in FY26 from midteens) as RPO is anticipated to grow at a 25% CAGR through FY26 with NGS becoming at least $6.5B in FY26 (30% CAGR),” he added.

Check out other analyst stock ratings.

Rosenblatt Securities On Palo Alto Networks

Analyst Catharine Trebnick reaffirmed a Buy rating while raising the price target from $250 to $290.

“PANW's platforms' strategy and broad capabilities couldn't come at a better time, with the threat landscape intensifying (cybercrime predicted to cost $8 trillion in FY23), ransomware attacks at all-time highs, up 50% 1H23, complicated by CISOs under extra scrutiny with tight budgets,” Trebnick wrote in a note.

“We remain impressed by multiple long-term product growth opportunities,” she added.

Oppenheimer On Palo Alto Networks

Analyst Ittai Kidron maintained an Outperform rating and price target of $290.

“Palo Alto delivered mixed 4QFY23 results, with Next-Gen Security (NGS) ARR growing an impressive 56% YoY (to $2.95B) and strong multi-module adoption for Prisma Cloud customers,” Kidron said.

“Increasing macro headwinds and deal scrutiny led to a modest miss to F1Q and FY24 revenue expectations, but management remains focused on the long-term growth opportunity and greater profitability,” he added.

Guggenheim Securities On Palo Alto Networks

Analyst John DiFucci reiterated a Neutral rating on the stock.

“PANW wasn’t the disaster some feared, as F4Q23 was solid, and while F1Q24 and FY24 revenue guidance was a little light, EPS for both periods and FY24 FCF guidance were strong,” DiFucci wrote in a note.

“Probably most important was the long-term guidance for both revenue and billings guidance of 17-19% CAGR (versus consensus estimates of 20% and 17%, respectively) and FCF margin guidance of sustained 37% + from FY24-FY26,” he added.

PANW Price Action: Shares of Palo Alto Networks had risen by 16.04% to $243.50 at the time of publication Monday.

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