Palo Alto Networks Q1 Earnings: Will It Beat Expectations Amid Strong Cybersecurity Demand?

Palo Alto Networks ($PANW), one of the biggest names in cybersecurity, has its fiscal Q1 2025 earnings coming up on November 20, 2024. The question is: will they deliver another strong performance or are we in for a surprise? Here’s what I’ve been looking into.

What Does Palo Alto Networks Do?

If you’re not familiar with $PANW, they’re a leader in cybersecurity. They provide solutions like firewalls, cloud security, and AI-based threat detection. Basically, they’re the ones helping businesses stay safe from cyberattacks.

Related: Is NVIDIA ($NVDA) Stock Worth the Hype? Here’s What the Data Shows

What Are Analysts Expecting?

Here’s what the pros are predicting for Q1 2025:

• EPS: $1.48
• Revenue: $2.1 billion to $2.13 billion

It’s a high bar, but $PANW has a solid history of meeting or beating these kinds of expectations.

How Did Palo Alto Networks Perform Last Quarter?

Last quarter, they killed it:

• EPS: $1.51 (beat the $1.41 estimate)
• Revenue: $2.19 billion (+12% YoY growth)
• Buybacks: Announced a $500M stock buyback, raising the total authorization to $1B.

So yeah, they’ve been delivering.

You may also like: Will $MRVL Beat Q3 Earnings? Is Marvell Technology Set to Break Out?

Is Palo Alto Networks Stock Overvalued?

Here’s a look at the key valuation metrics:

• P/E Ratio: 53.16 (trailing), 61.66 (forward)
• P/B Ratio: 24.61
• Free Cash Flow (FCF) Yield: 2.5%

The takeaway? It’s not a cheap stock. A lot of future growth is already baked into the price.

Check out: Shopify (SHOP) Earnings Preview: Is Now the Time to Buy, Hold, or Sell?

What’s Up With Insider Selling?

This part made me pause. Over $407M worth of shares were sold by insiders in the past year, with barely any insider buying (just $2K). That’s not exactly a vote of confidence.

What Are the Risks for $PANW?

Here are a few things I’m keeping an eye on:

1. Valuation: It’s expensive, with high P/E and P/B ratios.
2. Insider Selling: Like I mentioned, a lot of shares have been sold by insiders.
3. Competition: The cybersecurity space is heating up with players like CrowdStrike and Zscaler. Growth in certain areas, like SASE (Secure Access Service Edge), is slowing.

Will Palo Alto Networks Beat Earnings?

Probably, yeah. They’ve got a strong history, and 29 analysts have raised their EPS estimates in the past 90 days. That’s usually a good sign.

Will the Stock Jump?

Honestly, I wouldn’t bet on it jumping big. The stock’s already pricey, so even a beat might not move it much. For a major pop, they’d need to deliver something unexpected, like upgraded guidance or a big new partnership.

What I’m Watching

If you’re following $PANW, here’s what to pay attention to in the earnings report:

1. Guidance: Are they expecting strong growth ahead?
2. Partnership Updates: News on deals with Deloitte or SLB could move the needle.
3. Platform Adoption: Are more customers using multiple products? That’s key for their long-term strategy.

Final Thoughts

Palo Alto Networks is a powerhouse in cybersecurity. They’ll likely beat earnings on November 20, but the stock might not skyrocket unless there’s a big surprise. I’m keeping an eye on their guidance and strategy updates—those will tell us more about what’s next.

Don’t miss: 5 Books That Will Make You Rich: Investing for Beginner

Quick Recap:

• EPS Estimate: $1.48
• Revenue Estimate: $2.1B-$2.13B
• Stock Price: $388.06
• Buybacks: $1B authorized
• Debt-to-Equity Ratio: 0.27

Let’s see how it plays out.

Original Tweet 👉