Palo Alto Networks (NASDAQ:PANW) shares trade nearly 5% higher in pre-open Wednesday following the company’s reported Q3 earnings.
Earnings per share of $1.10 came in better than the consensus estimate of $0.93. Revenue increased 24% year-over-year to $1.7 billion, compared to the consensus estimate of $1.72B.
“We continued to demonstrate our commitment to profitable growth in Q3. As a result, we are raising our cash flow margin and operating margin guidance for FY'23 as we balance driving efficiency goals while investing for medium-term growth,” said CFO Dipak Golechha.
For Q4/23, the company expects EPS of $1.26-$1.30, compared to the consensus of $1.20. FQ4 revenue is seen in the range of $1.937-$1.967B, compared to the consensus of $1.95B. Total billings are anticipated in the range of $3.15-$3.20B, representing year-over-year growth of 17-19%.
For the full year, the company anticipates EPS of $4.25-$4.29, easily ahead of the consensus of $4.02. Revenue is seen in the range of $6.88-$6.91B while analysts were looking for $6.89B.
Total billings are expected in the range of $9.18-$9.23B, representing year-over-year growth of 23-24%.
Goldman Sachs analysts hiked the price target to $230 as Palo Alto's breadth of growth drivers continues to drive durability of growth.
"We view selling more into the installed base as a key driver of superior unit economics that will likely drive structurally higher margins (and upside to the Street) over the next 3 years."
Mizuho analysts also lifted the target to $230 and remain bullish on the company's "improving mix shift toward higher-growth recurring revenue."
"We reiterate our view that the co. clearly possesses the strongest array of cloud assets among traditional network security vendors. PANW remains one of our top picks for CY23," analysts said.
Additional reporting by Senad Karaahmetovic