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What's in the Offing for Palo Alto Networks' (PANW) Q4 Earnings?
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Palo Alto Networks (PANW - Free Report) is slated to release fourth-quarter fiscal 2021 results on Aug 23.
The company projects year-over-year revenue growth of 23-24% to $1.165-$1.175 billion. The Zacks Consensus Estimate for the same is pegged at $1.17 billion, suggesting a 23.47% increase from the year-ago period.
The company anticipates non-GAAP earnings of $1.42-$1.44 per share. The consensus mark for the same is pegged at $1.44 per share, indicating a year-over-year marginal decline of 2.7%.
The company’s earnings beat estimates in all of the trailing four quarters, the average surprise being 10.7%.
Let’s see how things have shaped up prior to the announcement.
Factors Likely to Have Impacted PANW Q4 Performance
Amid the pandemic-induced continued remote-working wave, increased use of the cloud and remote networks has given rise to escalating sophisticated cyberattacks. This has led to a rise in demand for cybersecurity solutions. Palo Alto’s fiscal third-quarter performance is likely to have benefited from this demand surge.
Moreover, the company’s earnings are likely to have been aided by the strong momentum for deal wins, which, in turn, are likely to have boosted revenue growth.
Palo Alto is also gaining from the acquisitions of Bridgecrew, which forms the basis of the Prisma public cloud, and Expanse, which forms the basis of Cortex. Prisma and Cortex are likely to have performed well during the fiscal fourth quarter, which is a positive for billings.
The growing and accelerated migration to cloud, owing to the social-distancing regulations, is likely to have boosted the adoption of the aforementioned platforms. Notably, the company projects year-over-year billings growth between 22% and 23% ($1.695 billion-$1.715 billion) during the to-be-reported quarter.
Furthermore, the FedRAMP recognitions are boosting the adoption of Palo Alto’s products by government organizations. The company’s Prisma Access, Cortex XDR, Cortex Data Lake, Prisma Cloud and WildFire have received FedRAMP recognitions.
This FedRAMP recognition reflects the trust the U.S. public sector puts in Palo Alto’s IoT security solutions. This is anticipated to have encouraged the adoption of its products during the period in discussion.
Nonetheless, higher sales incentives related to the Next-Generation Security products are expected to have hurt the company’s bottom-line performance. Additionally, forex headwinds, and higher marketing and sales expenses might have weighed on the company’s profitability during the fiscal fourth quarter. Besides, high acquisition related expenses might have dragged down margins.
What Our Model Says
Our proven model does not predict an earnings beat for Palo Alto this time around. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Though Palo Alto currently carries a Zacks Rank of 3, it has an Earnings ESP of -2.04%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Image: Bigstock
What's in the Offing for Palo Alto Networks' (PANW) Q4 Earnings?
Palo Alto Networks (PANW - Free Report) is slated to release fourth-quarter fiscal 2021 results on Aug 23.
The company projects year-over-year revenue growth of 23-24% to $1.165-$1.175 billion. The Zacks Consensus Estimate for the same is pegged at $1.17 billion, suggesting a 23.47% increase from the year-ago period.
The company anticipates non-GAAP earnings of $1.42-$1.44 per share. The consensus mark for the same is pegged at $1.44 per share, indicating a year-over-year marginal decline of 2.7%.
The company’s earnings beat estimates in all of the trailing four quarters, the average surprise being 10.7%.
Let’s see how things have shaped up prior to the announcement.
Palo Alto Networks, Inc. Price and EPS Surprise
Palo Alto Networks, Inc. price-eps-surprise | Palo Alto Networks, Inc. Quote
Factors Likely to Have Impacted PANW Q4 Performance
Amid the pandemic-induced continued remote-working wave, increased use of the cloud and remote networks has given rise to escalating sophisticated cyberattacks. This has led to a rise in demand for cybersecurity solutions. Palo Alto’s fiscal third-quarter performance is likely to have benefited from this demand surge.
Moreover, the company’s earnings are likely to have been aided by the strong momentum for deal wins, which, in turn, are likely to have boosted revenue growth.
Palo Alto is also gaining from the acquisitions of Bridgecrew, which forms the basis of the Prisma public cloud, and Expanse, which forms the basis of Cortex. Prisma and Cortex are likely to have performed well during the fiscal fourth quarter, which is a positive for billings.
The growing and accelerated migration to cloud, owing to the social-distancing regulations, is likely to have boosted the adoption of the aforementioned platforms. Notably, the company projects year-over-year billings growth between 22% and 23% ($1.695 billion-$1.715 billion) during the to-be-reported quarter.
Furthermore, the FedRAMP recognitions are boosting the adoption of Palo Alto’s products by government organizations. The company’s Prisma Access, Cortex XDR, Cortex Data Lake, Prisma Cloud and WildFire have received FedRAMP recognitions.
This FedRAMP recognition reflects the trust the U.S. public sector puts in Palo Alto’s IoT security solutions. This is anticipated to have encouraged the adoption of its products during the period in discussion.
Nonetheless, higher sales incentives related to the Next-Generation Security products are expected to have hurt the company’s bottom-line performance. Additionally, forex headwinds, and higher marketing and sales expenses might have weighed on the company’s profitability during the fiscal fourth quarter. Besides, high acquisition related expenses might have dragged down margins.
What Our Model Says
Our proven model does not predict an earnings beat for Palo Alto this time around. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Though Palo Alto currently carries a Zacks Rank of 3, it has an Earnings ESP of -2.04%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
KB Home (KBH - Free Report) has an Earnings ESP of +0.63% and sports a Zacks Rank #1, at present.You can see the complete list of today’s Zacks #1 Rank stocks here.
Chewy Inc. (CHWY - Free Report) has an Earnings ESP of +20.00% and currently carries a Zacks Rank of 2.
AutoZone (AZO - Free Report) has an Earnings ESP of +9.54% and carries a Zacks Rank #2, at present.