Palo Alto Networks Still A 'Best-In-Breed Security Vendor' After Mixed Results & Reviews

Shares of Palo Alto Networks Inc PANW were down more than 12.3 percent on Friday trading, following the announcement of strong third quarter results and relatively weak guidance on Thursday afternoon. However, analysts were not as bearish as the market – although some were.

Related Link: Benzinga Breakdown: Analysts Give Palo Alto More Mixed Reviews Than 'Batman V Superman'

In a report issued Friday, Nomura analyst Frederick Grieb issued a Buy rating and $200 price target on the shares.

A Look Into The Results

Below are the most important figures from Palo Alto’s third quarter earnings report, as per Nomura experts.

The company posted product revenue of $162.1 million, below consensus of $165.6 million. On the other hand, services revenue of $183.7 million, beat estimates of $173.9 million. Services comprised 53 percent of Palo Alto’s total revenue as more users shift towards subscription based offerings.

A Look Forward

The Street has been quite worried about a slowdown in security spend recently, the analysts noted, citing the touch compares created by the spectacular growth seen last year and the fade-out of the “emergency” spend derived from a few public breaches.

Given that Palo Alto is a best-in-class security vendor, Nomura experts anticipate that its lukewarm results will probably be “read across negatively to the security software group.”

Having said this and issued a Buy rating, the analysts remain positive on Palo Alto and its well-rated product offering, and consistent, proven ability to post share gains.

 

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

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Posted In: Analyst ColorEarningsNewsGuidancePrice TargetReiterationAnalyst RatingsMoversTechFrederick GriebNomura
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