Palo Alto Networks (PANW - Free Report) is scheduled to release fourth-quarter fiscal 2020 results on Aug 24.
The company expects year-over-year revenue growth of 14-15% to $915-$925 million. The Zacks Consensus Estimate for the same is pegged at $920.8 million, suggesting a 14.3% increase from the year-ago quarter.
The company anticipates non-GAAP earnings in the band of $1.37-$1.40. The consensus mark for the same is pegged at $1.39, indicating a year-over-year decline of 5.4%.
The company’s earnings beat estimates in all of the trailing four quarters, the average surprise being 10.1%.
Let’s see how things have shaped up for the announcement.
Factors at Play
Palo Alto’s fiscal fourth-quarter earnings are likely to have been aided by strong momentum for deal wins, which in turn is likely to have boosted revenue growth.
Moreover, a huge global workforce is working remotely in an effort to contain the spread of coronavirus. But more people logging into employers' networks means a greater need for security. This trend is likely to have spurred demand for the company’s products in the quarter under review.
The company is also gaining from the acquisition of Redlock, which forms the basis of the Prisma public cloud, and Demisto, which forms the basis of Cortex. Prisma and Cortex are likely to have performed well during the fiscal fourth quarter, which is a positive for billings. The growing and accelerated migration to cloud owing to the social-distancing regulations is likely to have boosted the adoption of these platforms. Notably, the company expects billings growth between 13% and 14% year over year ($1.19 billion-$1.21 billion) during the to-be-reported quarter.
Furthermore, FedRAMP recognitions are boosting the adoption of Palo Alto’s products by government organizations. In March, the company announced that its IoT product — ZingboxIoT Guardian — has been deemed “In Process” for the Federal Risk and Authorization Management Program (FedRAMP). This FedRAMP recognition reflects the trust the U.S. public sector puts in Palo Alto’s IoT security solutions. Further, the Prisma Cloud’s “In Process” status is boosting the visibility of the company’s products to government organizations. This is likely to have encouraged the adoption of its products during the period in discussion.
However, increased investment in enhancing sales and marketing capabilities might have hurt the the company’s bottom-line performance.
Apart from this, the Sino-U.S. trade war, along with travel and import restrictions related to the coronavirus pandemic, has been negatively impacting the manufacturing of certain products as the components are available only in China. This is likely to have remained an overhang during the quarter to be reported.
What Our Model Says
Our proven model does not predict an earnings beat for Palo Alto this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Palo Alto currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Agilent Technologies (A - Free Report) has an Earnings ESP of +5.00% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autodesk (ADSK - Free Report) has an Earnings ESP of +4.44% and carries a Zacks Rank of 2, currently.
Alibaba Group (BABA - Free Report) has an Earnings ESP of +2.16% and currently carries a Zacks Rank of 3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Palo Alto Networks (PANW - Free Report) is scheduled to release fourth-quarter fiscal 2020 results on Aug 24.
The company expects year-over-year revenue growth of 14-15% to $915-$925 million. The Zacks Consensus Estimate for the same is pegged at $920.8 million, suggesting a 14.3% increase from the year-ago quarter.
The company anticipates non-GAAP earnings in the band of $1.37-$1.40. The consensus mark for the same is pegged at $1.39, indicating a year-over-year decline of 5.4%.
The company’s earnings beat estimates in all of the trailing four quarters, the average surprise being 10.1%.
Let’s see how things have shaped up for the announcement.
Factors at Play
Palo Alto’s fiscal fourth-quarter earnings are likely to have been aided by strong momentum for deal wins, which in turn is likely to have boosted revenue growth.
Moreover, a huge global workforce is working remotely in an effort to contain the spread of coronavirus. But more people logging into employers' networks means a greater need for security. This trend is likely to have spurred demand for the company’s products in the quarter under review.
The company is also gaining from the acquisition of Redlock, which forms the basis of the Prisma public cloud, and Demisto, which forms the basis of Cortex. Prisma and Cortex are likely to have performed well during the fiscal fourth quarter, which is a positive for billings. The growing and accelerated migration to cloud owing to the social-distancing regulations is likely to have boosted the adoption of these platforms. Notably, the company expects billings growth between 13% and 14% year over year ($1.19 billion-$1.21 billion) during the to-be-reported quarter.
Furthermore, FedRAMP recognitions are boosting the adoption of Palo Alto’s products by government organizations. In March, the company announced that its IoT product — ZingboxIoT Guardian — has been deemed “In Process” for the Federal Risk and Authorization Management Program (FedRAMP). This FedRAMP recognition reflects the trust the U.S. public sector puts in Palo Alto’s IoT security solutions. Further, the Prisma Cloud’s “In Process” status is boosting the visibility of the company’s products to government organizations. This is likely to have encouraged the adoption of its products during the period in discussion.
However, increased investment in enhancing sales and marketing capabilities might have hurt the the company’s bottom-line performance.
Apart from this, the Sino-U.S. trade war, along with travel and import restrictions related to the coronavirus pandemic, has been negatively impacting the manufacturing of certain products as the components are available only in China. This is likely to have remained an overhang during the quarter to be reported.
What Our Model Says
Our proven model does not predict an earnings beat for Palo Alto this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Palo Alto currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Agilent Technologies (A - Free Report) has an Earnings ESP of +5.00% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autodesk (ADSK - Free Report) has an Earnings ESP of +4.44% and carries a Zacks Rank of 2, currently.
Alibaba Group (BABA - Free Report) has an Earnings ESP of +2.16% and currently carries a Zacks Rank of 3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on A - FREE
Get the latest research report on ADSK - FREE
Get the latest research report on PANW - FREE
Get the latest research report on BABA - FREE