Palo Alto Networks Set to Soar Following Big Earnings Win

Palo Alto Networks (NASDAQ: PANW) surged in pre-market trading today and is now trading up close to 4% following an impressive earnings beat yesterday. The cybersecurity firm beat expectations for earnings and revenue, while also providing a bullish outlook for 2022.

Let’s take a look at some of the details.

What does Palo Alto Networks Do?

Palo Alto Networks is a California-based cybersecurity company. Its core products revolve around firewalls and cloud-based security offerings. Operating in over 150 countries worldwide, Palo Alto Networks is at the forefront of cloud security. 

It has made a number of savvy acquisitions across the industry over the past three years, with 10 companies being purchased for a total of roughly $3.4 billion. With these companies now finally fully integrated within Palo Alto Networks’ platform, investors are eager to see the investments bear fruit.

How did Palo Alto Networks earnings go?

Palo Alto Networks posted earnings per share (EPS) of $1.74 on revenue of $1.31 billion. These figures outpaced analyst estimates of $1.65 per share and $1.26 billion while representing growth of 12% and 30% respectively. CEO Nikesh Arora explained that the company,

“continued to benefit from strength across our three security platforms, driven by strong cybersecurity demand, organizations architecting for hybrid work and growing their hyperscale cloud footprints.”

Building on this solid growth, the firm also outlined strong guidance for the upcoming year. Billings, revenue, and EPS all saw their outlook raised for the coming year with strong growth expected. 

So, should I buy Palo Alto Networks stock?

Palo Alto Networks represents a strong way to introduce some cloud-based diversity to your portfolio. The company has shown solid growth over the past number of quarters and is set to be one of the major beneficiaries of the worldwide move to more remote-based work.

Following a string of acquisitions, the business is now confident that it has extended itself into many important areas in cybersecurity that it had identified as “up-and-coming.” With no further acquisitions in the past year, and the company starting in August that it had no further plans to purchase, it seems that phase of rapid expansion is now over. 

As Arora stated, “this quarter marks the end of all integrations of our acquired businesses over the last few years.” With its platform now fully built-out, Palo Alto Networks can double down on its work in growing its user base and continuing to drive recurring revenue.

Having only made its debut on the Nasdaq 100 index in December, Palo Alto Networks appears to be living up to its billing. With strong growth in the books and ample opportunity to continue to expand, it looks like a relatively solid portfolio addition for the coming few years.

Market AnalysisPalo Alto Networks
Pádraig BolgerPádraig Bolger
  • Pádraig Bolger
  • Financial Writer at MyWallSt

  • Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world’s leading sports brand.

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