Yahoo Finance Palo Alto (PANW) to Report Q3 Earnings: What to Expect?
Palo Alto Networks PANW is scheduled to report its third-quarter fiscal 2024 results on May 20.
Palo Alto projects its fiscal third-quarter revenues in the range of $1.95-$1.98 billion, which suggests a year-over-year increase of 13-15%. The Zacks Consensus Estimate is pegged at $1.97 billion, which implies growth of 14.3% from the year-ago reported figure.
For the fiscal third quarter, the company expects non-GAAP earnings in the range of $1.24-$1.26 per share. The Zacks Consensus Estimate for PANW’s non-GAAP earnings is pegged at $1.25 per share, which indicates an increase of 13.6% from the year-ago quarter’s earnings of $1.10.
Palo Alto’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 15.8%.
Let’s see how things are shaping up for this announcement.
Palo Alto Networks, Inc. Price and EPS Surprise
Palo Alto Networks, Inc. price-eps-surprise | Palo Alto Networks, Inc. Quote
Factors to Consider
Palo Alto’s third-quarter performance is likely to have benefited from the strong momentum stemming from deal wins, which is expected to boost its top line. The strong demand for form factor hardware products, particularly machine learning-powered models that ensure zero-trust network security for organizations, is expected to contribute to the quarterly performance.
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 2% and 4% ($2.3-$2.35 billion) in the to-be-reported quarter.
Moreover, the increased use of the cloud and remote networks in a hybrid working environment has resulted in escalating cyberattacks. This is leading to a rise in the demand for cybersecurity solutions. PANW’s fiscal third-quarter performance is likely to have benefited from this demand surge.
Palo Alto has been gaining from the Bridgecrew acquisition, which forms the crux of the Prisma public cloud and Xpanse, which encompasses the basis of Cortex. Prisma and Cortex are likely to have continued performing well in the fiscal third quarter as well.
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 PANW’s IoT security solutions. This is anticipated to have encouraged the adoption of its products during the period in discussion.
Higher software mix, normalization in the supply-chain environment and efficiencies in customer support are anticipated to have aided the gross margin in the to-be-reported quarter. Additionally, better cost management is expected to drive the third-quarter bottom line.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Palo Alto this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though PANW currently carries a Zacks Rank of #2, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, NVIDIA NVDA, Zscaler ZS and Agilent Technologies A have the right combination of elements to post an earnings beat in their upcoming releases.
NVIDIA sports a Zacks Rank #1 and has an Earnings ESP of +2.38%. The company is scheduled to report first-quarter fiscal 2025 results on May 22. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 20.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s first-quarter earnings stands at $5.50 per share, which indicates a year-over-year improvement of 404.6%. It is estimated to report revenues of $24.19 billion, which suggests a jump of approximately 236.2% from the year-ago quarter.
Zscaler carries a Zacks Rank #2 and has an Earnings ESP of +0.39%. The company is slated to report third-quarter fiscal 2024 results on May 30. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 28.2%.
The Zacks Consensus Estimate for Zscaler’s third-quarter earnings is pegged at 65 cents per share, which indicates a year-over-year increase of 35.4%. The consensus mark for revenues stands at $535.6 million, which calls for a year-over-year rise of 27.9%.
Agilent Technologies is slated to report second-quarter fiscal 2024 results on May 29. The company has a Zacks Rank #3 and an Earnings ESP of +0.42% at present. Agilent Technologies’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.5%.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.19 per share, which suggests a decrease of 6.3% from the year-ago quarter’s earnings of $1.27. Agilent Technologies’ quarterly revenues are estimated to decline 8% to $1.58 billion from $1.72 billion in the year-ago quarter.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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