Here’s why Palo Alto stock jumped 6% in extended trading on Thursday

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on May 20, 2021
  • Palo Alto Networks beats Wall Street estimates in the fiscal third quarter.
  • The cybersecurity company raised its guidance for the full financial year.
  • Palo Alto shares were about 6% up in after-hours trading on Thursday.

Palo Alto Networks Inc. (NYSE: PANW) jumped about 6% in after-hours trading on Thursday as the company reported financial results for the third quarter that beat Wall Street estimates and raised its guidance for the full year.

Including the price action, shares of the company are now exchanging hands at $362 per share (£255.10 per share). In comparison, the stock had started the year 2021 at a per-share price of a lower $352. At the time of writing, Palo Alto Networks has a market capitalisation of $33.31 billion.

Financial performance

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Palo Alto reported $145.1 million of net loss in the third quarter that translates to $1.50 per share. In the same quarter last year, its loss was capped at a lower $74.8 million, or 77 cents per share. In the prior quarter (Q2), the NYSE-listed firm had recorded $142 million of loss instead.

On an adjusted basis, the cybersecurity company earned $1.38 per share in Q1 versus the year-ago figure of $1.17 per share. Palo Alto generated $1.07 billion of revenue in the recent quarter – an increase from $869.4 million last year.

At $1.29 billion, billings climbed in the first quarter from $1.02 billion in Q1 of the previous year. According to FactSet, experts had forecast the company to post $1.06 billion of revenue, $1.23 billion of billings, and $1.29 of earnings per share in the recent quarter.

Guidance for the full financial year

For the full financial year, Palo Alto now forecasts up to $5.3 billion of revenue and $5.97 to $5.99 of adjusted EPS. Analysts, on the other hand, are calling for $4.18 billion of revenue and $5.86 of adjusted per-share earnings. The American multinational expects up to $5.30 billion of billings this year versus the FactSet consensus of $5.16 billion.

In separate news from the United States, Applied Materials Inc also published its quarterly earnings report on Thursday.

CEO Nikesh Arora’s remarks

Commenting on the earnings report on Thursday, CEO Nikesh Arora said:

“The work-from-home shift earlier in the year and recent cybersecurity issues have increased the focus on security. Coupled with good execution, this has driven great strength across our business. In particular, we saw a number of customers make large commitments to Palo Alto Networks across our three major platforms. We see these trends continuing into our fiscal fourth quarter, bolstering our confidence in our pipeline.”

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