Palo Alto Scares The Cybersecurity Sector

The company reported fiscal year 2017 first-quarter non-GAAP earnings of 55 per share, up from $0.34 per share last year, and also exceeding the $0.53 per share consensus estimate.

However, total revenues rose 34 percent year-over-year to $398.1 million, shy of the Street forecast of $400.2 million. The company indicated that it added over 1,500 new customers during the quarter. Billings climbed to $516.9 million from the year-ago's $388 million, trailing estimates.

For the second quarter, the company expects non-GAAP earnings per share of $0.61-$0.63 on revenues of $426 million to $432 million. The guidance was light when compared to the Street forecasts of $0.63 per share in non-GAAP earnings and $438.88 million in revenues.

Despite the off-color revenues and lackadaisical second quarter guidance, Wunderlich is positive on the company. The firm's analyst Bill Choi said he believes the company is well positioned to gain market share and generate operating leverage.

In sympathy moves, Palo Alto's peers are also trending lower on Tuesday.

At The Time Of Writing

• Cyberark Software Ltd CYBR was slipping 1.58 percent at $53.76.
• FireEye Inc FEYE was losing 6.47 percent to $12.79.
• Palo Alto Networks was down 12.78 percent at $140.48.
• Proofpoint Inc PFPT was down 2.44 percent to $85.31.