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Palo Alto Networks Inc. shares surged in the extended session Thursday after the cybersecurity company’s quarterly results and outlook topped Wall Street estimates as its product portfolio benefits from the COVID-19 pandemic.
Palo Alto Networks PANW, -2.12% reported a fiscal third-quarter loss of $74.8 million, or 77 cents a share, compared with a loss of $20.2 million, or 21 cents a share, in the year-ago period. Adjusted earnings were $1.17 a share, compared with $1.31 a share in the year-ago period. Revenue rose to $869.4 million from $726.6 million in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of 94 cents a share on revenue of $831.1 million, while the company had forecast 96 cents to 98 cents a share on revenue of $835 million to $850 million.
The company expects adjusted fiscal fourth-quarter earnings of $1.37 to $1.40 a share on revenue of $915 million to $925 million, while analysts had forecast adjusted earnings of $1.31 a share on revenue of $916.8 million.
Palo Alto Networks offers products like GlobalProtect and Prisma Access, which allow for secure network cloud access for businesses, something which is definitely getting a fair share of use with millions of employees working from home during the COVID-19 pandemic. The company has been on an M&A tear over the past few years, acquiring companies such as Demisto and Evident.io.
“The world will likely be in a state of transition over the next 12 to 18 months due to the COVID-19 pandemic,” Palo Alto Networks Chief Executive Nikesh Arora said in a prepared statement. “We believe this will prompt key trends to accelerate, including remote working models, shift to the cloud, and focus on AI/ML and automation to drive effective cybersecurity outcomes.”
Palo Alto Networks shares rallied 7% after hours, following a 2.1% decline in the regular session to close at $229.50. Palo Alto Networks shares are down 0.8% for the year. In comparison, the ETFMG Prime Cyber Security ETF HACK, -0.79% is up 2%, the S&P 500 index SPX, -0.77% is down 9%, and the tech-heavy Nasdaq Composite Index COMP, -0.96% is up 3.5%.
Of the 37 analysts who cover Palo Alto Networks, 25 have buy or overweight ratings, and 12 have hold ratings, with an average price target of $232.50, according to FactSet data.
