Cybersecurity company Palo Alto Networks Inc (NYSE: PANW) reported a top- and bottom-line beat in its fiscal second-quarter results, sending shares to new highs. Here is a summary of how some of the Street's top analysts reacted to the print.
Guggenheim: Strong Quarter
Palo Alto's report was strong across all metrics, including an acceleration in Product Revenues to 33 percent year-over-year, Guggenheim Partners' Imtiaz Koujalgi said in a note. Other notable takeaways include improving sales, a decrease in S&M expenses from the prior quarter while simultaneously revenue rose 8 percent over the same time period.
Management's guidance was presented above expectations but still "light" when factoring in how strong the quarter was, said Koujalgi. In fact, the guidance assumes total revenues and product revenues dropping from the prior quarter, which is "unusual" and a reason for skeptics to pick on. Nevertheless, management is taking a conservative stance ahead of a tougher back half of the year.
Koujalgi maintains a Buy rating on Palo Alto Networks with a price target lifted from $275 to $300.
KeyBanc: Easy Beat
Palo Alto's earnings beat was highlighted by revenue growth coming in ahead of the high end of management's own guidance, KeyBanc Capital Markets' Rob Owens said in a research report. Services revenue also came in better than expected as the company continues to see success in unattached and attached offerings. Margins of 24.6 percent in the quarter was 200 basis points short of the record high seen in the fourth quarter of 2017.
The company's top-line momentum remains impressive especially compared to the broader industry that is showing a low-to-mid-teens aggregate growth, Owens wrote. He maintains at Overweight, price target lifted from $250 to $280.
BMO: A Look At Guidance
Palo Alto's total revenue guidance for the fiscal third quarter is around 1 percent above consensus estimates versus prior beats of 1 to 2 percent, BMO Capital Markets' Keith Bachman said in a research report. While the guide also implies a 1 percent quarter-over-quarter dip versus an average of 3 percent over the past two years, it may be looking conservative with the potential for upside.
Bachman maintains at Outperform, price target lifted from $240 to $285.
Wedbush: Position Of Strength
Palo Alto's report shows the company is clearly operating from a position of strength and remains "laser focused" on creating a leading cloud platform and a firewall refresh that is "still alive and well," Wedbush's Daniel Ives said in a research report. This positions the company to realize significant cross-selling opportunities given a customer base of around eight thousand and backed by a more specialized and better-equipped sales force.
Meanwhile, the RedLock is proving to be a strong acquisition which is "paying serious dividends" and performing better than management's own expectations, Ives wrote. The analyst maintains at Outperform, price target lifted from $265 to $300.
Shares of Palo Alto Networks were trading higher by more than 7 percent Wednesday and earlier hit a 52-week high of $260.63.
Latest Ratings for PANW
|Feb 2019||Morgan Stanley||Maintains||Overweight||Overweight|
|Feb 2019||Credit Suisse||Maintains||Underperform||Underperform|
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