On Tuesday, Palo Alto Networks (NASDAQ:PANW) saw its stock price target increased by Macquarie to $285 from the previous $270, while the firm maintained a Neutral stance on the stock.
The cybersecurity company reported third-quarter figures that aligned with market expectations, showcasing total revenue of $1.98 billion, slightly above the consensus estimate of $1.97 billion. Billings for the quarter were reported at $2.33 billion, just shy of the $2.34 billion that analysts had anticipated.
Palo Alto Networks outperformed earnings per share (EPS) expectations, posting $1.32 compared to the consensus prediction of $1.25. The company's Remaining Performance Obligations (RPO), which indicate future revenue, grew by 22.8% year-over-year to reach $11.30 billion, surpassing the expected $11.27 billion. This growth is seen as a key highlight from the report.
Looking ahead to the fourth quarter of fiscal year 2024, Palo Alto Networks has provided guidance that includes revenue projections of between $2.15 billion and $2.17 billion, which aligns with the consensus of $2.16 billion.
Billings are expected to be in the range of $3.43 billion to $3.48 billion, closely matching the consensus forecast of $3.45 billion. Non-GAAP EPS is forecasted to be between $1.40 and $1.42, which is in line with the consensus estimate of $1.41.
Management expressed confidence in a substantial pipeline leading into the fourth quarter, a sentiment that provides some relief as the company continues its transition towards a platform-based go-to-market strategy aimed at rekindling profitable growth.
Palo Alto Networks has also been focusing on expanding its AI security offerings, which were announced in early May. These new products are designed to protect against emerging threats as more companies adopt AI technologies.
In addition to the focus on AI, Palo Alto Networks has recently announced the acquisition of IBM (NYSE:IBM)'s QRadar SaaS assets. The deal, described as totaling over $500 million plus earnouts, is for a company that generated $100 million in SaaS revenue in 2023. The acquisition is expected to be finalized by the end of September 2024.
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