On Tuesday, RBC Capital Markets adjusted its financial outlook for Palo Alto Networks (NASDAQ:PANW) shares, a leading cybersecurity company. The firm lowered its price target to $360 from the previous $365 but maintained its Outperform rating on the stock.
The adjustment follows Palo Alto Networks' recent financial performance, which, according to the firm, showed underlying momentum despite billings falling short of expectations.
The firm acknowledged that the quarter's results did not entirely meet expectations but suggested that the billings metric might be losing its significance in gauging the company's business health.
RBC Capital Markets posited that shifting focus to Remaining Performance Obligations (RPO) or bookings could provide a clearer picture for guidance in the future.
RBC Capital Markets expressed continued confidence in Palo Alto Networks' strategic position within the cybersecurity industry. The firm believes the company is poised to consolidate security spending and sustain growth rates that outperform its peers. This sentiment comes despite the firm's slight reduction in forecasted billings and Free Cash Flow (FCF) estimates for the fiscal year 2025.
In anticipation of further discussions on the company's trajectory, RBC Capital Markets announced it will host a fireside chat with the management of Palo Alto Networks on May 23, 2024. The event is expected to provide investors with more insights into the company's operations and strategic initiatives.
The revised price target of $360 reflects a modest recalibration of expectations based on the recent quarter's financial results. RBC Capital Markets continues to endorse Palo Alto Networks with an Outperform rating, signaling optimism about the company's future performance in the cybersecurity sector.
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