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Palo Alto Networks (NASDAQ:PANW) is scheduled to report second-quarter earnings on Tuesday, February 20th, after market close.
Analysts expect a year-over-year increase in both the top and bottom lines, with earnings per share of $1.30 on revenues of $1.97 billion.
The cybersecurity firm is expected to post strong second-quarter results as it benefits from expanding cyber budgets, resilient demands for its services, and requirements from both regulators and insurers.
Consolidation will be another important theme as enterprise customers consolidate their cybersecurity vendors to combat vendor sprawl.
One of the key metrics investors will be focusing on are billings, after the company missed expectations for the last two quarters. “Last quarter, more customers chose 1-year payment plans versus financing deals through PANFS, creating a headwind to billings,” noted Wells Fargo.
“PANW continues to benefit from strong enterprise demand for Security, favorable exposure to high priority CIO spending categories, and consolidation of market share across its platform, but cyclical Network Security spending remains a headwind,” said J.P. Morgan.
According to Wedbush, there is a $200 billion dollar growth opportunity in cloud security alone “up for grabs” over the next few years for those vendors such as PANW that have the solution sets to protect critical cloud deployments from growing threats/attacks.
Over the last three months, the company has seen significant revisions to its estimates. Its earnings per share estimates have been revised upwards 36 times vs. two downward revisions, while its revenue estimates have seen 22 upwards revisions, compared to 12 downgrades.
Seeking Alpha analysts at large consider PANW a Hold. This compares with average Wall Street rating of Buy and SA Quant rating of Hold.
