Why Is Palo Alto Networks’ Stock Tanking After Beat-And-Raise Quarter? 10 Analysts Weigh In On ‘Positive Momentum’

Shares of Palo Alto Networks Inc (NASDAQ:PANW) dipped in early trading on Tuesday, although the company reported upbeat revenues and earnings for its fiscal third quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

• RBC Capital Markets analyst Matthew Hedberg reiterated an Outperform rating, while reducing the price target from $365 to $360.
• BMO Capital Markets analyst Keith Bachman reaffirmed an Outperform rating, while raising the price target from $327 to $334.
• Goldman Sachs analyst Gabriela Borges maintained a Buy rating and price target of $310.
• Wedbush analyst Daniel Ives reiterated an Outperform rating and price target of $375.
• Rosenblatt analyst Catharine Trebnick reaffirmed a Neutral rating and price target of $300.
• Stifel analyst Adam Borg maintained a Buy rating and price target of $300.
• Needham analyst Matt Dezort reiterated a Buy rating and price target of $345.
• JMP Securities analyst Trevor Walsh reaffirmed a Market Outperform rating and price target of $380.
• Truist Securities analyst Joel Fishbein maintained a Buy rating and price target of $350.
• Oppenheimer analyst Ittai Kidron reiterated an Outperform rating and price target of $330.

Check out other analyst stock ratings.

RBC Capital Markets: While “not a clean quarter relative to expectations,” Palo Alto Networks’ underlying momentum improved, Hedberg said. Although billings missed expectations, this metric “is becoming less relevant to the underlying tone of the business,” he added.

The company appears “well-positioned to consolidate security spend and to maintain above-peer growth,” the analyst wrote. “Management noted strong bookings and backlog growth as well as stable cybersecurity demand trends provided the confidence to raise the midpoint of FY/24 guidance,” he further stated.

BMO Capital Markets: Investors had been expecting Palo Alto Networks to deliver a beat on billings, Bachman said. He added, however, that the company was tracking in-line with fiscal 2025 estimates.

“We expect greater deferred payments to continue to pressure billings for the next several quarters, or at least until PANW starts to lap its consolidation initiative in the January FY25 quarter,” the analyst wrote. Palo Alto Networks’ recent deal with IBM (NYSE:IBM) “is a win for both parties,” he added.

Goldam Sachs: While Palo Alto Networks reported its quarterly billings in-line with expectations, its revenue and …

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