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Palo Alto (PANW) Beats Q3 Earnings and Revenue Estimates
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Palo Alto Networks (PANW - Free Report) reported third-quarter fiscal 2021 non-GAAP earnings of $1.38 per share, which surpassed the Zacks Consensus Estimate by 7.81%. Moreover, the bottom line compared favorably with the year-ago quarter’s earnings of $1.17 per share.
The company’s revenues of $1.07 billion improved 24% year over year. The figure also beat the Zacks Consensus Estimate of $1.06 billion.
The top line was primarily aided by several deal wins and increased adoption of the company’s next-generation security platforms on the rise in the remote-working trend and heightened need for stronger security. Growing traction in the Prisma and Cortex offerings also acted as a tailwind.
Palo Alto Networks, Inc. Price, Consensus and EPS Surprise
Product revenues increased 2.8% year over year to $288.9 million and contributed to 27% of total revenues. The company’s subscription and support revenues, which accounted for 73% of total revenues, improved 33.4% to $785 million.
Further, billings improved 26.5% year over year to $1.29 billion. Deferred revenues jumped 30% to $4.4 billion.
Palo Alto’s non-GAAP gross margin contracted 60 basis points (bps) on a year-over-year basis to 74.6%. However, non-GAAP operating margin improved 60 bps to 17%. Operational efficiencies, and lower travel and event expenses due to COVID-19 drove operating margin expansion.
Palo Alto exited the fiscal third quarter with cash, cash equivalents and short-term investments of $2.95 billion compared with $3.17 billion recorded at the end of the previous quarter. The company’s balance sheet does not carry any long-term debt.
During the quarter, it generated cash flow from operations of $277.8 million and free cash flow of $250.9 million.
Guidance
For fourth-quarter fiscal 2021, Palo Alto anticipates year-over-year revenue growth of 23-24% to $1.165-$1.715 billion. Billing growth is anticipated between 22% and 23%, ($1.695 billion-$1.715 billion).
Non-GAAP earnings per share are estimated in the range of $1.42-$1.44.
Encouraged by the strong third-quarter performance, the company raised its guidance for fiscal 2021. Palo Alto now projects revenues of $4.20-$4.21 billion, up from the previous guidance of $4.15-$4.20 billion, indicating year-over-year growth of 23-24%. Billing growth is now anticipated at 23% ($5.28 billion-$5.30 billion).
Palo Alto forecasts fiscal 2021 adjusted earnings between $5.97 and $5.99 per share. Earlier, the company had projected adjusted earnings between $5.80 and $5.90 per share.
Zacks Rank & Stocks to Consider
Palo Alto currently carries a Zacks Rank #3 (Hold).
The long-term earnings growth rate for Silicon Motion Technology Corporation, Lam Research and LG Display is currently pegged at 8%, 32.8% and 32.56%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
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Palo Alto (PANW) Beats Q3 Earnings and Revenue Estimates
Palo Alto Networks (PANW - Free Report) reported third-quarter fiscal 2021 non-GAAP earnings of $1.38 per share, which surpassed the Zacks Consensus Estimate by 7.81%. Moreover, the bottom line compared favorably with the year-ago quarter’s earnings of $1.17 per share.
The company’s revenues of $1.07 billion improved 24% year over year. The figure also beat the Zacks Consensus Estimate of $1.06 billion.
The top line was primarily aided by several deal wins and increased adoption of the company’s next-generation security platforms on the rise in the remote-working trend and heightened need for stronger security. Growing traction in the Prisma and Cortex offerings also acted as a tailwind.
Palo Alto Networks, Inc. Price, Consensus and EPS Surprise
Palo Alto Networks, Inc. price-consensus-eps-surprise-chart | Palo Alto Networks, Inc. Quote
Quarterly Details
Product revenues increased 2.8% year over year to $288.9 million and contributed to 27% of total revenues. The company’s subscription and support revenues, which accounted for 73% of total revenues, improved 33.4% to $785 million.
Further, billings improved 26.5% year over year to $1.29 billion. Deferred revenues jumped 30% to $4.4 billion.
Palo Alto’s non-GAAP gross margin contracted 60 basis points (bps) on a year-over-year basis to 74.6%. However, non-GAAP operating margin improved 60 bps to 17%. Operational efficiencies, and lower travel and event expenses due to COVID-19 drove operating margin expansion.
Palo Alto exited the fiscal third quarter with cash, cash equivalents and short-term investments of $2.95 billion compared with $3.17 billion recorded at the end of the previous quarter. The company’s balance sheet does not carry any long-term debt.
During the quarter, it generated cash flow from operations of $277.8 million and free cash flow of $250.9 million.
Guidance
For fourth-quarter fiscal 2021, Palo Alto anticipates year-over-year revenue growth of 23-24% to $1.165-$1.715 billion. Billing growth is anticipated between 22% and 23%, ($1.695 billion-$1.715 billion).
Non-GAAP earnings per share are estimated in the range of $1.42-$1.44.
Encouraged by the strong third-quarter performance, the company raised its guidance for fiscal 2021. Palo Alto now projects revenues of $4.20-$4.21 billion, up from the previous guidance of $4.15-$4.20 billion, indicating year-over-year growth of 23-24%. Billing growth is now anticipated at 23% ($5.28 billion-$5.30 billion).
Palo Alto forecasts fiscal 2021 adjusted earnings between $5.97 and $5.99 per share. Earlier, the company had projected adjusted earnings between $5.80 and $5.90 per share.
Zacks Rank & Stocks to Consider
Palo Alto currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Silicon Motion Technology Corporation (SIMO - Free Report) , Lam Research Corporation (LRCX - Free Report) and LG Display Co., Ltd. (LPL - Free Report) , all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Silicon Motion Technology Corporation, Lam Research and LG Display is currently pegged at 8%, 32.8% and 32.56%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>