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Palo Alto (PANW) to Report Q1 Earnings: What's in the Cards?
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Palo Alto Networks (PANW - Free Report) is scheduled to report its first-quarter fiscal 2023 results on Nov 17.
Palo Alto projects its fiscal first-quarter revenues in the $1.535-$1.555 billion range, suggesting a year-over-year increase of 23%-25%. The Zacks Consensus Estimate for the same is pegged at $1.55 billion, suggesting growth of 24% from the year-ago reported figure.
For the fiscal first quarter, the Zacks Consensus Estimate for PANW’s non-GAAP earnings stands at 68 cents per share, indicating an increase of 23.6% from the year-ago quarter’s earnings of 55 cents.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.5%.
Factors to Consider
In first-quarter fiscal 2023, Palo Alto is likely to have benefited from strong momentum stemming from deal wins, which is further expected to have boosted its top line. The strong demand for form factor hardware products, particularly the machine learning-powered models that ensure zero-trust network security for organizations, is expected to have contributed to the quarterly performance.
Palo Alto has been gaining from the Bridgecrew acquisition, which forms the crux of the Prisma public cloud, and Xpanse, which forms the basis of Cortex. Prisma and Cortex are likely to have continued performing well in the fiscal first quarter as well.
The growing and accelerated migration to the cloud in a post-pandemic era is likely to have boosted the adoption of the aforementioned platforms. The company projects year-over-year billings growth between 22% and 23% ($1.68 billion-$1.70 billion) during the to-be-reported quarter.
Moreover, increased use of cloud and remote networks amid a hybrid working environment has resulted in escalating cyberattacks currently. This is leading to a rise in demand for cybersecurity solutions. PANW’s fiscal first-quarter performance is likely to have benefited from this demand surge.
Furthermore, Federal Risk and Authorization Management Program (FedRAMP) recognitions are boosting the adoption of Palo Alto’s products by government organizations. The company’s Prisma Access, Cortex XDR, Cortex Data Lake, Prisma Cloud and WildFire received FedRAMP recognitions.
This FedRAMP recognition reflects the U.S. public sector’s trust in Palo Alto’s IoT security solutions. This is anticipated to have encouraged the adoption of its products during the period in discussion.
However, higher sales incentives related to Next-Generation Security products are expected to have hurt the company’s bottom line. Additionally, forex headwinds and higher marketing and sales expenses are expected to have weighed on the company’s profitability during the fiscal first quarter. Also, high acquisition-related expenses are likely to have dragged down margins.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for PANW 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. However, that is not the case here.
PANW currently has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Per our model, Helmerich & Payne (HP - Free Report) , lululemon athletica (LULU - Free Report) and RCI Hospitality (RICK - Free Report) are some stocks that investors can consider, as these have the right combination of elements to post an earnings beat in their upcoming releases.
Helmerich & Payne has an Earnings ESP of +15.10% and currently sports a Zacks Rank #1. The company is slated to report its fourth-quarter fiscal 2022 results on Nov 16. Helmerich & Payne’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters and missed once, the average surprise being 118.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HP’s fiscal fourth-quarter earnings stands at 43 cents per share, implying a year-over-year increase of 169.4%. Helmerich is estimated to report revenues of $591.4 million, which suggests a surge of 72% from the year-ago quarter.
lululemon athletica has an Earnings ESP of +2.35% and a Zacks Rank #2. The company is anticipated to report its third-quarter fiscal 2023 results on Dec 8. lululemon’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.4%.
The Zacks Consensus Estimate for LULU’s fiscal third-quarter earnings is pegged at $1.95 per share, indicating a 20.4% surge from the year-ago quarter’s $1.62 per share. The consensus mark for revenues stands at $1.80 billion, suggesting a year-over-year increase of 24.4%.
RCI Hospitality has an Earnings ESP of +4.15% and carries a Zacks Rank #2 at present. The company is expected to report its fourth-quarter fiscal 2022 results on Dec 13. RICK’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 39.4%.
The Zacks Consensus Estimate for quarterly earnings is pegged at $1.33 per share, suggesting a year-over-year decrease of 15.8%. RICK’s quarterly revenues are estimated to increase 26.6% year over year to $69.5 million.
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Palo Alto (PANW) to Report Q1 Earnings: What's in the Cards?
Palo Alto Networks (PANW - Free Report) is scheduled to report its first-quarter fiscal 2023 results on Nov 17.
Palo Alto projects its fiscal first-quarter revenues in the $1.535-$1.555 billion range, suggesting a year-over-year increase of 23%-25%. The Zacks Consensus Estimate for the same is pegged at $1.55 billion, suggesting growth of 24% from the year-ago reported figure.
For the fiscal first quarter, the Zacks Consensus Estimate for PANW’s non-GAAP earnings stands at 68 cents per share, indicating an increase of 23.6% from the year-ago quarter’s earnings of 55 cents.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.5%.
Factors to Consider
In first-quarter fiscal 2023, Palo Alto is likely to have benefited from strong momentum stemming from deal wins, which is further expected to have boosted its top line. The strong demand for form factor hardware products, particularly the machine learning-powered models that ensure zero-trust network security for organizations, is expected to have contributed to the quarterly performance.
Palo Alto has been gaining from the Bridgecrew acquisition, which forms the crux of the Prisma public cloud, and Xpanse, which forms the basis of Cortex. Prisma and Cortex are likely to have continued performing well in the fiscal first quarter as well.
The growing and accelerated migration to the cloud in a post-pandemic era is likely to have boosted the adoption of the aforementioned platforms. The company projects year-over-year billings growth between 22% and 23% ($1.68 billion-$1.70 billion) during the to-be-reported quarter.
Moreover, increased use of cloud and remote networks amid a hybrid working environment has resulted in escalating cyberattacks currently. This is leading to a rise in demand for cybersecurity solutions. PANW’s fiscal first-quarter performance is likely to have benefited from this demand surge.
Furthermore, Federal Risk and Authorization Management Program (FedRAMP) recognitions are boosting the adoption of Palo Alto’s products by government organizations. The company’s Prisma Access, Cortex XDR, Cortex Data Lake, Prisma Cloud and WildFire received FedRAMP recognitions.
This FedRAMP recognition reflects the U.S. public sector’s trust in Palo Alto’s IoT security solutions. This is anticipated to have encouraged the adoption of its products during the period in discussion.
However, higher sales incentives related to Next-Generation Security products are expected to have hurt the company’s bottom line. Additionally, forex headwinds and higher marketing and sales expenses are expected to have weighed on the company’s profitability during the fiscal first quarter. Also, high acquisition-related expenses are likely to have dragged down margins.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for PANW 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. However, that is not the case here.
PANW currently has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Per our model, Helmerich & Payne (HP - Free Report) , lululemon athletica (LULU - Free Report) and RCI Hospitality (RICK - Free Report) are some stocks that investors can consider, as these have the right combination of elements to post an earnings beat in their upcoming releases.
Helmerich & Payne has an Earnings ESP of +15.10% and currently sports a Zacks Rank #1. The company is slated to report its fourth-quarter fiscal 2022 results on Nov 16. Helmerich & Payne’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters and missed once, the average surprise being 118.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HP’s fiscal fourth-quarter earnings stands at 43 cents per share, implying a year-over-year increase of 169.4%. Helmerich is estimated to report revenues of $591.4 million, which suggests a surge of 72% from the year-ago quarter.
lululemon athletica has an Earnings ESP of +2.35% and a Zacks Rank #2. The company is anticipated to report its third-quarter fiscal 2023 results on Dec 8. lululemon’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.4%.
The Zacks Consensus Estimate for LULU’s fiscal third-quarter earnings is pegged at $1.95 per share, indicating a 20.4% surge from the year-ago quarter’s $1.62 per share. The consensus mark for revenues stands at $1.80 billion, suggesting a year-over-year increase of 24.4%.
RCI Hospitality has an Earnings ESP of +4.15% and carries a Zacks Rank #2 at present. The company is expected to report its fourth-quarter fiscal 2022 results on Dec 13. RICK’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 39.4%.
The Zacks Consensus Estimate for quarterly earnings is pegged at $1.33 per share, suggesting a year-over-year decrease of 15.8%. RICK’s quarterly revenues are estimated to increase 26.6% year over year to $69.5 million.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.