Several Analysts Raise Palo Alto Networks' Estimates Post Q3 Results: Here's Details

Several analysts raised the price target of Palo Alto Networks Inc PANW following Q3 FY23 results.

Yesterday, the company reported EPS of $1.38, above the analyst consensus estimate of $1.16, and revenue of $1.88 billion beat the analyst consensus estimate of $1.84 billion. 

Full-year 2024 earnings are estimated to be between $5.40 and $5.53 per share against an estimate of $5.34. The company saw full-year 2024 total revenue between $8.15 billion and $8.20 billion versus the estimate of $8.19 billion.

Needham analysts Matt Dezort and Alex Henderson reiterated a Buy and price target of $305.

The analyst expects PANW to produce solid revenue growth and FCF/share gains over the coming years while taking share in high-growth Security end-markets as a trusted Platform of choice in large Enterprise environments.

Henderson raised the estimates for revenue and EPS to $8.173 billion (from $8.163 billion) and $5.52 (from $5.30) for FY24 and $9.709 billion (from $9.693 billion) and $6.57 (from $6.34) for FY25.

Oppenheimer analyst Ittai Kidron maintained the Outperform rating and $310 price target.

The analyst sees the billings miss as 'cosmetic', and remains bullish on the outlook as "platformization" of Palo Alto's portfolio can successfully deliver sustainable profitable growth across multiple avenues. 

Kidron expects revenue and EPS of $8.2 billion and $5.49 (vs. $5.39 prior) in FY24 and $9.7 billion and $6.53 (vs. $6.30 prior) in FY25. 

Stifel analyst Adam C. Borg reiterated the price target of $280 and a Buy rating.

The analyst says PANW has several drivers to sustain at least high-teens top-line growth and operating margin/FCF expansion in coming years.

Borg estimates revenue and EPS of $8.18 billion and $5.46 in FY24 and $9.68 billion and $6.37 in FY25.

Mizuho Securities analyst Gregg Moskowitz reaffirmed a Buy rating and price target of $280.

The analyst remains bullish on the company's improving mix shift toward higher-growth recurring revenue and says the company has the strongest array of cloud assets among traditional network security vendors.

Moskowitz estimates revenue of $8.176 billion in FY24 and $9.665 billion in FY25.

Goldman Sachs analyst Gabriela Borges reiterated a Buy rating and a price target of $274.

The analyst expects firewall industry growth to remain muted and notes PANW's more diversified portfolio across the cloud (~5% of revenue) and Cortex (~10%) to drive consistent growth even in years when any given product cycle is slower.

The analyst raised revenue and EPS estimates to $8.207 billion (from $8.187 billion) and $5.46 (from $5.30) for FY24, $9.765 billion (from $9.734 billion) and $6.43 (from $6.40) for FY25 and, $11.609 billion (from $11.511 billion) and $7.91 (from $7.74) for FY26.

Morgan Stanley analyst Hamza Fodderwala maintained an Overweight rating and a price target of $304.

The analyst says the billings miss may be a short-term overhang on the stock until PANW returns to normal beat/raise cadence. 

The analyst continues to see ~20% FCF/share CAGR and 25%-30% EPS CAGR over the next three years, reaching ~$12 in FCF per share and ~$8 in EPS by CY25.

The analyst estimates EPS of $5.33 for FY24, $6.39 for FY25, and $7.74 for FY26.

Raymond James also maintained an Outperform rating and raised the price target to $260 from $250.

Price Action: PANW shares are trading lower by 5.85% at $241.37 on the last check Thursday.