Palo Alto Networks Rally Security Software Demand

Palo Alto Networks, Inc. rallied on Tuesday’s extended trading after its fiscal second-quarter earnings benefitted from solid security software demand.

The American cybersecurity company hiked 6.41% or 30.49 points to $506.00 per share.

It rebounded from its decline of 1.38% or 6.66 points to $475.51 per share in the regular trading stretch.

Accordingly, the upturn sent the California-based technology firm to a total market valuation of $46.92 billion.

Palo Alto Networks’ Q2 revenue edged up 30.00% year-over-year to $1.30 billion. This figure surpassed the average market estimate by 2.86% to $1.28 billion.

At the same time, it significantly grew from $1.02 billion in the same period of fiscal 2021.

Then, the firm came out with quarterly earnings of $1.74 per share. It outpaced the analysts’ expectation of $1.65 and the previous $1.55 record.

Correspondingly, the latest report represented an earnings surprise of 5.45%.

In the prior quarter, experts expected the security software maker to post earnings of $1.57 per share.

Then, the business marked an uptrend as it posted an EPS of $1.64 per share. It delivered a surprise of 4.46%.

Palo Alto Networks has beaten consensus earnings and revenue estimates four times over the last four quarters.

Moreover, its billings strengthened 32.00% annually to $1.60 billion, compared with projections of $1.52 billion. It also jumped from the past $1.21 billion results.

Palo Alto Networks also released its current quarter guidance ending in April. The firm expected per-share earnings in a range of $1.65 to $1.68 on revenue of $1.36 billion.

Meanwhile, analysts anticipated earnings of $1.63 per share on revenue of $1.35 billion.

Palo Alto Networks Stock; What’s Next?

Shares of Palo Alto Networks underperformed the market since the beginning of 2022, with a drop of 12.62% year-to-date.

The company continues to elevate its efforts in the Firewall network security space. It has spent over $3.40 billion, marking ten acquisitions over the past three years.

Palo Alto Networks targets to build a broad cloud-based security platform.

It currently develops Firewall appliances that protect computer networks by blocking online intrusions and monitoring web-based apps.

On Tuesday, it unveiled the new platform Cortex XSIAM, which stands for extended security intelligence and automation management.

The AI-driven technology enables continuous vulnerability discovery through attack-surface operations. It uses machine learning to automate response actions.

In line with this, the software maker anticipated Q3 billings to post at $1.60 billion, higher than the estimates of $1.59 billion.

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