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Palo Alto (PANW) to Report Q4 Earnings: What's in the Cards?

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Palo Alto Networks Inc. (PANW - Free Report) is slated to release fourth-quarter fiscal 2018 results on Sep 6.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 9.3%.

In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate as well as the guided range. Also, it recorded year-over-year improvement on both counts.

Buoyed by the performance, the company provided an encouraging guidance for the fiscal fourth quarter and also raised the fiscal 2018 outlook.

What to Expect?

For the fiscal fourth quarter, Palo Alto anticipates revenues of $625-$635 million, up 23-25% year over year. The Zacks Consensus Estimate is pegged at $633.19 million.

Non-GAAP earnings per share are expected in the range of $1.15-$1.17. The Zacks Consensus Estimate is pegged at $1.17, indicating a year-over-year increase of 27.2%.

Let’s see how things are shaping up prior to this announcement.    
Factors to Consider

Palo Alto is growing rapidly in the cybersecurity space thanks to its innovative next generation cyber security solutions. Over the past two years, the company launched several subscription-based products, including WildFire, AutoFocus, Aperture, Traps and Virtual, which have been witnessing strong adoption among organizations.

Additionally, successful sales execution is helping the company acquire new clients. Increase in its existing customers’ expenditures is contributing to overall growth. In the last reported quarter, the company added nearly 3,000 customers, bringing the total count to 51,000.

The company’s innovative product portfolio and continued efforts to enhance the same is not only helping it expand to new customers but also opening new avenues for existing customers.

Furthermore, acquisitions have been one of Palo Alto’s key strategies to enhance its product portfolio as well as expand the company’s global reach. The acquisitions of public could security provider, and Israel-based automated endpoint security provider, Secdo are expected to be accretive to the company’s portfolio.

Additionally, the company’s existing cloud partnerships with companies like Amazon’s (AMZN - Free Report) Amazon Web Services and Alphabet’s (GOOGL - Free Report) Google Cloud are positives.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Palo Alto has an Earnings ESP of +0.40% and carries a Zacks Rank #3, which indicates a likely positive surprise.

Another Key Pick

Here is a stock, which you may also consider as our model shows that it has the right combination of elements to post an earnings beat in its upcoming release:

Marvell Technology Group Ltd. (MRVL - Free Report) with an Earnings ESP of +0.15% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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