Proactive Investors - Palo Alto Networks Inc (NYSE:NASDAQ:PANW, ETR:5AP) moved over 7% lower in pre-market trading on Tuesday as investors fled on underwhelming revenue forecasts.
Cybersecurity firm Palo Alto had guided for fourth-quarter revenue to come in between US$2.15 billion and US$2.17 billion in results on Monday.
This was off market expectations for a figure at the top-end of Palo Alto’s range, according to Bloomberg data.
Expectations for fourth-quarter billings of US$3.47 billion was also at the high end of the company’s guidance for the figure to sit between US$3.43 billion and US$3.48 billion.
Though third-quarter per-share earnings of US$1.32 and a 15% rise in revenue to US$1.98 billion beat analysts’ forecasts, Monday’s results followed disappointing results in February.
Chief executive Nikesh Arora had signalled at the time that cybersecurity customers were facing “spending fatigue”, prompting fears over weaker spending ahead.
He added: “We see no change in the space or trajectory” while discussing cybersecurity spending in an earnings call on Monday.
Wedbush analysts batted off concerns though, arguing Palo Alto was poised for stronger growth in 2025.
“We maintain our outperform rating and US$375 price target,” Wedbush’s Daniel Ives said.
“We would be buyers on any knee-jerk weakness this morning as this remains one of our favourite cybersecurity names.”
Shares fell 7.5% to US$299.50 in pre-market trading.