Palo Alto Networks Inc (NASDAQ:PANW) shares are trading higher Tuesday after the company reported better-than-expected results for the fourth quarter and issued strong guidance.
What Happened: Palo Alto beat analyst expectations on the top and bottom lines in the fourth quarter as revenue climbed 16% year-over-year to $2.54 billion versus estimates of $2.50 billion. The company also reported fourth-quarter adjusted earnings per share of 95 cents versus estimates of 88 cents.
Next-generation security annual recurring revenue increased 32% year-over-year to $5.6 billion and remaining performance obligations grew 24% year-over-year to $15.8 billion.
“Our strong execution in Q4 reflects a fundamental market shift in which customers understand that a fragmented defense is no defense at all against modern threats,” said Nikesh Arora, chairman and CEO of Palo Alto Networks.
Palo Alto guided for first-quarter revenue of $2.45 billion to $2.47 billion versus estimates of $2.43 billion and first-quarter adjusted earnings per share of 88 cents to 90 cents versus estimates of 85 cents. The company also guided for fiscal 2026 revenue of $10.48 billion to $10.53 billion versus estimates of $10.43 billion, and adjusted earnings per share of $3.75 to $3.85 versus estimates of $3.67.
Analysts React: Multiple analysts weighed in on the stock following Palo Alto’s quarterly results.
- Needham analyst Mike Cikos reiterated Palo Alto with a Buy rating and maintained a price target of $230.
- Rosenblatt analyst Catharine Trebnick maintained Palo Alto with a Buy and raised the price target from $215 to $225.
- BofA Securities analyst Tal Liani upgraded Palo Alto from Neutral to Buy and maintained a price target of $215.
- WestPark Capital analyst Casey Ryan reiterated Palo Alto with a Hold rating.
- Barclays analyst Saket Kalia maintained Palo Alto with an Overweight and raised the price target from $210 to $215.
PANW Price Action: Palo Alto shares were up 7.06% at $188.61 at the time of publication Tuesday, according to Benzinga Pro.
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