Palo Alto Networks Inc. shares soared in premarket trade Friday 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, +3.67% 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 6% premarket. Palo Alto Networks shares are down 0.8% for the year. In comparison, the ETFMG Prime Cyber Security ETF HACK, +1.65% is up 2%, the S&P 500 index SPX, +0.23% is down 9%, and the tech-heavy Nasdaq Composite Index COMP, +0.42% 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.