The market saw a number of declines this morning, but Palo Alto Networks (PANW), one of my favorite stocks, was not one of them. PANW shares gapped up sharply after the company reported its fiscal first-quarter results.
Palo Alto Networks is a cybersecurity company that provides enterprise security platforms to customers in the education, energy, financial services, healthcare and public sector industries, among others. Its programs also offer a number of features, including user identification, site-to-site virtual private networks (VPN) and remote access SSL VPN.
Cybersecurity is a large concern for many businesses right now, so it’s no surprise that Palo Alto Networks has more than 26,000 customers—and I’m confident that this number will continue to grow.
One glance at this morning’s earnings report reveals just how promising of a future Palo Alto has. In its fiscal first-quarter earnings report, the cybersecurity company reported $297.2 million in revenue, which represented a 55% year-on-year increase. It also beat analysts’ expectations by 4.6%. They did report a loss of $38.7 million, or $0.45 per share, but excluding special items, adjusted earnings came in at $0.35 per share. This beat the consensus EPS estimate by 9.4%.
For the second quarter, Palo Alto is expected to bring in $314 million to $318 million in sales, or between 44% and 46% annual sales growth. It’s also projected to earn $0.38 to $0.39 per share.
With results like this, it’s easy to see why PANW bucked the market’s trend today—and I expect it to stay strong. PANW is an A-rated Strong Buy in Portfolio Grader.