Stifel says its long-term positive view on Palo Alto Networks Inc NYSEPANW remains intact despite the company’s disappointing first quarter results. The brokerage reiterated its Buy rating and $210 price target, as it believes investors should view the
The cybersecurity company reported first quarter revenue at $398.1 million, missing the estimate and the consensus, with EPS of $0.55, which was marginally ahead of expectations.
Billings grew 33.2 percent to $516.9 million, while product sales grew 11 percent to $163.8 million. But, both metrics came in below the estimates. Palo Alto’s product revenue and billings numbers were hit by an elongated sales cycle, resulting in some of the company's larger deals slipping into second quarter.
“We view the miss mostly under the macro lens - namely that while we see a generally healthy enterprise security spending environment, we're also seeing greater scrutiny and generally more "stops along the way" before a deal closes,” analyst Gur Talpaz wrote in a note.
Further, the analyst attributed the disappointing results to higher levels of discounting from Palo Alto's rivals and greater visibility from vendors like Cisco Systems, Inc.
“However, we are encouraged by the improving traction of the company's Traps (now protecting >1 million endpoints and servers) and VM-Series (>2,000 customers; half of this quarter's new customer additions were first-time PANW customers) solutions,” Talpaz highlighted.
At last check,
|Sep 2016||Rosenblatt||Initiates Coverage on||Buy|
|Aug 2016||Raymond James||Downgrades||Strong Buy||Outperform|
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