Palo Alto Networks pops as Wall Street calls Friday night call 'water under the bridge'
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Palo Alto Networks (NASDAQ:PANW) shares rose more than 16% in early trading on Monday after the cyber security company reported fourth-quarter results and guidance, with Wall Street investment firms stating that the Friday night conference call is now "water under the bridge." 
"After much drama about a Friday afternoon release effectively putting the Street on edge in the cyber sector with the murky macro backdrop, Palo Alto printed a relatively strong quarter with a slight top-line miss and bottom-line beat as the company continues to leverage its next-gen portfolio driving further growth," Wedbush Securities analyst Dan Ives wrote in an investor note.
Ives added that the company's "confident" guidance and formal updates on the medium-term outlook in the sector gave investors some ease.
Led by CEO Nikesh Arora, Palo Alto (PANW) said it expects 2024 billings to be between $10.9B and $11B, above the $10.77B estimate, with revenue between $8.15B and $8.2B, slightly below the $8.38B estimate.
Full-year adjusted earnings are forecast to be between $5.27 and $5.40 per share, above the $4.98 per share that analysts were expecting.
For the first-quarter, Palo Alto (PANW) expects billings between $2.05B and $2.08B, with revenue between $1.82B and $1.85B, below the $1.93B estimate. 
The company also expects to see a 17% to 19% compound annual growth rate in billings and revenue from fiscal 2023 to fiscal 2026, along with 25% growth in remaining performance obligations through fiscal 2026.
Bank of America analyst Tal Liani said the guidance "calmed investor concerns" and the company is benefiting from the "successful migration from legacy hardware to software-based solutions and integration to a platform-based approach."
Liani raised the firm's price target on Palo Alto (PANW) to $290 from $270 and reiterated the buy rating after the results. 
Other medium-term outlooks that Palo Alto (PANW) gave include a 20% or more compound annual growth rate in adjusted earnings per share between fiscal 2023 and fiscal 2026 and an adjusted operating margin for fiscal 2026 between 28% and 29%.
"With a need for cybersecurity skyrocketing and a combined 2028 [total addressable market] of $210 billion across zero trust, cloud, and autonomous SecOps, Palo Alto is innovating its entire product portfolio leveraging both precision and generative AI to provide enhanced analysis for its install base," Ives noted. 
"Overall, we believe PANW is still very well positioned and expect to see considerable strength in innovating its portfolio while also seeing major expansions occur within its install base as more enterprises move to the cloud," Ives, who has an outperform rating and $290 price target, added.

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