Palo Alto Networks (NASDAQ:PANW) stock rose about 2% premarket on Tuesday after fiscal fourth quarter results and fiscal year 2025 outlook drew positive reactions from analysts.
KeyBanc Capital Markets maintained its Overweight rating on the stock and raised the price target to $400 from $380.
Analysts led by Eric Heath said that they reiterated their Overweight rating following a solid, if fairly in-line, fiscal fourth quarter and fiscal year 2025 guidance consistent with their expectations. Fiscal fourth quarter revenue beat by 1%, billings beat by 2%, remaining performance obligation, or RPO met, and margins beat.
The company’s management transitioned guidance to an RPO basis and expects 19% to 20% growth for both fiscal first quarter 2025, and fiscal year 2025, both slightly below consensus, but about in line with investor expectations, according to the analysts.
The company also provided a one-time billings guidance of 12% for fiscal year 2025, slightly ahead of consensus 11%, and noted it assumes a similar mix of flexible billings programs as fiscal year 2024, the analysts added.
Regarding the CrowdStrike outage, Palo’s management did not indicate it had an impact on bookings for fiscal fourth quarter but does expect it to help its momentum in Cortex XDR.
Heath and his team said they remain positive on Palo’s leadership in several strategic markets and its leading position as a consolidator of security spend. They noted that the price target was raised to $400 on modestly higher estimates.
Meanwhile, RBC Capital Markets kept its Outperform rating on Palo Alto and raised the price target to $410 from $390.
“We thought the quarter represented a strong finish to the FY with momentum building into FY/25,” said a team of analysts led by Matthew Hedberg.
The analysts said they liked hearing about the second half of fiscal year 2024 accelerating trends, platformization progress and that guidance was transitioned to RPO from billings, something they wanted to see and should better align with the underlying trends, mainly with the moving parts around platformization.
Hedberg and his team added that initial fiscal year 2025 guidance was slightly ahead and should set a positive tone as they think further upside could be likely.
JMP maintained its Market Outperform and $380 price target on Palo Alto.
Analyst Trevor Walsh and his team noted that they maintained the rating and price target after the company reported “respectable F4Q24 results” with non-GAAP EPS of $1.51 (consensus $1.41) on revenue of $2.19B (consensus $2.16B), up 12% year-over-year, and a fiscal year 2024 non-GAAP operating margin of 27.3%, up 320bps from fiscal year 2023.
The analysts added that it was a solid finish to fiscal year 2024 as Chairman and CEO Nikesh Arora asserted that “I know there was significant consternation around our platformization strategy six months ago. All I want to say is, I wish, we started down that path sooner.”
Palo Alto (PANW) has a Hold rating at Seeking Alpha’s Quant Rating system, which consistently beats the market. Meanwhile, the Seeking Alpha authors’ average rating is also Hold, but the average Wall Street analysts’ rating is more positive with a Buy.