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Wall Street analysts looking ahead to Palo Alto Networks’ (NASDAQ:PANW) earnings release on February 21 have mixed opinions on how positive the release will be.
At Wedbush, analysts told investors in a note that their firm expects Palo Alto to report a strong quarter.
“We believe Palo Alto will deliver a solid quarter when the cyber security stalwart reports earnings next Tuesday, Feb 21st after the close,” wrote analysts in a research note. “Our field checks have been relatively robust for PANW throughout the quarter as, despite an uncertain macro, we are seeing strong deal activity across the board with cloud-influenced enterprise-wide deals the theme of the quarter.”
The analysts said that they believe PANW is seeing “considerable strength” with major expansions within its installed base as more enterprises move to the cloud with the PANW platform, while some significant deal activity in the federal vertical “could be a shining star for the company.”
Meanwhile, Guggenheim analysts told investors in a research note that they are concerned with the potential for less billings upside in guidance for the upcoming quarter for PANW.
“Field checks were strong in North America, but not as strong as they have been in previous periods, and surprisingly weaker in EMEA,” said analysts. “The numerical setup suggests there is potentially less upside to billings than in prior periods this quarter, and there doesn’t seem to be much room for upside to guidance. With our global checks pointing to relative weakness abroad, we take a relatively cautious stance into results.”
Citi analysts said the second-half setup is not the easiest, but PANW remains defensive.
They added that although they have concerns, they see a “modest in-Q beat, in line F3Q guide, and reaffirmed FY targets with boosted operating profitability (achievable as hiring has slowed, supply-chain-related GM pressures will alleviate) key for stock outperformance from here – not a tall order at 7x EV/S and 20x EV/FCF.”
