Palo Alto Q2 earnings preview: Another stellar quarter ahead for cybersecurity star?
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Palo Alto Networks (NASDAQ:PANW) is scheduled to announce Q2 earnings results on Tuesday, February 21st, after market close.
The cybersecurity company's billings and next-generation security annual recurring revenue rates were "the stars of the show" in its Q1 results, which prompted praise from analysts.
Palo Alto (PANW) has forecast adjusted EPS between $0.76 and $0.78 cents on revenue of $1.63B-1.66B. Billings is expected to be between $1.94B and $1.99B.
The consensus EPS Estimate is $0.77 (-55.7% Y/Y) and the consensus Revenue Estimate is $1.65B (+25.0% Y/Y).
Over the last 3 months, EPS estimates have seen 33 upward revisions and 3 downward. Revenue estimates have seen 15 upward revisions and 14 downward.
Wedbush sees a solid quarter ahead, noting some large deal activity in the federal vertical and "considerable strength with major expansions within its installed base as more enterprises move to the cloud with the PANW platform".
Checks by Morgan Stanley and KeyBanc Capital Markets suggest strong U.S. and international channel billings and bookings, healthy demand and large deal activity as more customers buy into the broader platform.
In late 2022 Morgan Stanley listed Palo Alto Networks (PANW) among its top software picks for 2023, noting that if it stays on its current path, it would be the first cybersecurity-specific software company to reach a $100B market cap.
However, Piper Sandler lowered its price target in January noting a lower earnings multiple as the company is in the process of consolidating security across networks, cloud computing and Cortex XDR.
Shares have performed better than peers Fortinet (FTNT), CrowdStrike (CRWD) and Zscaler (ZS) over the past 12 months, bottoming out in January.

Investors will need to consider if this January bottom "is robust enough to sustain its bear market lows before recovering its upward bias" according to recent SA contributor analysis by JR Research.
Over the last 2 years, PANW has beaten EPS estimates 100% of the time and has beaten revenue estimates 100% of the time.