Palo Alto rises on solid fiscal Q4 results, better-than-feared guidance

Investing.com --  Palo Alto Networks reported upbeat guidance Monday after reporting fiscal fourth-quarter results that topped Wall Street on increased deal making underpinned by growing cybersecurity demand.

Palo Alto Networks Inc (NASDAQ:PANW) rose 2% in premarket trading Tuesday. 

The cybersecurity firm reported earnings of $1.51 a share on revenue of $2.2 billion, beating Wall Street estimates of $1.41 and $2.16 billion, respectively.

Next-Generation Security annual recurring revenue rose 43% year over year to $4.2B amid a jump in deal making activity. 

Looking ahead, the company said it expected fiscal first-quarter adjusted earnings of between $1.47 and $1.49 per share ahead of analysts' estimates for $1.42. Revenue was forecast in a range of $2.10B to $2.13B, in line with estimates for $2.10 billion.

For fiscal year 2025, adjusted earnings were expected in a range of $6.18 to $6.31 per share on revenue of between $9.10B and $9.15B.

"We finished off the year with strong execution on our platformization strategy in Q4," said Nikesh Arora, chairman and CEO of Palo Alto Networks," the company said in its Q4 earnings report. 

Following the report, several investment firms raised their price targets on PANW shares. 

"While there are a number of moving parts to the print, we generally view the guidance as better than feared," said Stifel analysts, who raised their target price from $360 to $385.

"More broadly, we continue to believe Palo remains well-positioned as a cybersecurity platform consolidator and has a number of drivers to sustain double-digit top-line growth and improving profitability," they added.

Separately, KeyBanc Capital Markets lifted their price objective from $380 to $400, citing "a solid, if fairly in-line, F4Q and FY25 guide."

"We remain positive on Palo's leadership in several strategic markets and its leading position as a consolidator of security spend."

Analysts at Barclays, JPMorgan, and UBS also raised their PANW price targets. 

Yasin Ebrahim contributed to this report.