Cybersecurity Star Dims Ahead of News Dump
Palo Alto Networks has long been popular with Wall Street analysts. It will be interesting to see if that sticks after the cybersecurity provider ruins their weekend. Ninety percent of analysts covering Palo Alto Networks rate the stock as a buy—the largest percentage of positive ratings of any cybersecurity company generating more than $1 billion in annual revenue, according to data from FactSet.
And that is for good reason, as Palo Alto has been one of the more reliable performers in the highly volatile sector. Annual revenue growth has averaged well over 20% over the past five years, while billings—a measure of business transacted in a given period—has beat analysts’ consensus forecast every quarter for the past four years. But the company’s coming report for its fourth fiscal quarter has investors worried.
Palo Alto will be reporting those results Friday after the closing bell—a highly unusual time for a scheduled earnings report. The company also noted that its conference call to discuss the results will last about two hours, as it also plans to update medium-term financial targets that were last given in an analyst meeting in 2021. It also plans to discuss items such as “product road map, go-to-market, financial objectives and total addressable market." An analyst meeting, in other words.
But late Friday afternoon is an unusual time for those as well. Investors seem to be assuming the worst: Palo Alto’s stock has sunk nearly 15% since the company announced its earnings date on Aug. 2.
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