Can Former Market Darling Palo Alto Gain Admirers Back With Q4 Print?

Palo Alto Networks Inc PANW's status as a market darling has taken a hit over the past few years as the stock traded near the $200 mark in 2015 only to flirt with the $100 mark for part of 2017 amid disappointing earnings reports. The question on many investors mind is can the company build momentum exiting the fourth-quarter earnings report Thursday.

BTIG's Joel Fishbein maintains a Buy rating on Palo Alto's stock with an unchanged $155 price target heading into the print which is expected to mark "another step along redemption road." The company is expected to report revenue of $484 million (up 20.7 percent year over year) in the quarter on billions of $635 million (up 11 percent) and earn 77 cents per share (see Fishbein's track record here).

The company likely benefited from growing vendor consolidation along with strong demand for its products, Fishbein commented in a research report. Pricing and deal sizes during the quarter also remain consistent with the past few quarters.

Looking forward to the full fiscal year 2018, Palo Alto's completed sales reorganization structure could improve productivity as the company's woes were "largely self-inflicted," the analyst argued. But that doesn't mean that success is guaranteed and the stock remains a "show me story" for at least the next few quarters. Nevertheless, the company is still the best-positioned vendor in the entire cybersecurity space and the company should see rapid growth along with margin expansion in the coming quarters.

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