Hot cybersecurity stock Palo Alto Networks‘ (PANW) fiscal second-quarter earnings and updated 2024 guidance underwhelmed investors. PANW stock tanked as investors mulled slowing sales in computer network “firewall” products versus growth in security services delivered from its cloud computing platform.
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The cybersecurity company released fiscal Q2 earnings after the market close on Tuesday. On the stock market today, Palo Alto stock retreated more than 19% to 295.51 in extended trading. Palo Alto Networks lowered guidance for the second straight quarter.
For fiscal Q2 ended Jan. 31, Palo Alto earnings rose 39% to $1.46 a share on an adjusted basis. Further, revenue for PANW stock rose 19% to $2 billion, including acquisitions.
Analysts expected earnings of $1.30 a share on sales of $1.97 billion.
PANW Stock: Billings Growth Misses
For the current quarter ending in April, Palo Alto forecast revenue in a range of $1.95 billion to $1.98 billion versus estimates of $2.04 billion. The company predicted billings, a sales growth metric, in a range of $2.3 billion to $2.35 billion, missing estimates of $2.62 billion.
For full-year 2024, Palo Alto lowered guidance. The company expects revenue of $7.975 billion at the midpoint of guidance, up 15.5% versus previous guidance of $8.15 billion to $8.2 billion.
The cybersecurity firm forecast billings of $10.15 billion versus previous guidance of $10.7 billion to $10.8 billion.
In November, Palo Alto lowered full-year fiscal 2024 billings guidance due to pressure in the network firewall business. Also, management told analysts that companies are taking longer to approve computer security purchases.
In addition, sales for firewall network appliances have slowed. Firewall appliances protect computer networks by blocking online intrusions and monitoring web-based apps. However, Palo Alto has built a broad cloud-based computer security platform through acquisitions.
Further, heading into the Palo Alto earnings report, the cybersecurity stock had advanced 24% in 2023.
Meanwhile, PANW stock holds a perfect Relative Strength Rating of 97 out of a best-possible 99, according to IBD Stock checkup.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
