Investing.com -- Palo Alto Networks (NASDAQ:PANW) reported mixed fiscal fourth-quarter results, but delivered an upbeat outlook for the current quarter, touting further strength in billings growth as earnings topped, but revenue fell short of Wall Street estimates.
Shares were up more than 12% in pre-market Monday trading following the report.
The beat on the bottom line was driven by an 18% rise in billings growth year over year in Q4.
The company touted further strength in billings to come, saying its billings in the quarter "didn't fully capture" the top-line strength seen in its remaining performance obligation and next-generation security average recurring revenue.
Looking ahead, the company said it expected fiscal first-quarter adjusted earnings of between $1.15 and $1.17 per share ahead of analysts' estimates for $1.12. Revenue was forecast in a range of $2.05B to $2.08B, in line with estimates for $1.93B.
Looking ahead, the company raised its guidance for the year across revenue, billings and earnings per share.
For fiscal year 2023, adjusted earnings were expected in a range of $5.27 to $5.40 per share on revenue of between $10.9B and $11B.
Palo Alto also updated its 3-year outlook targets as it now sees 17% and 19% annual revenue and billings growth, respectively, compared to the Street at 20% revenue and 17% billings growth.
BTIG analysts hiked the price target to $270 per share as both 2024 and long-term outlook look "compelling."
"PANW continues to successfully transform its business away from a traditional appliance-based firewall model into a more durable long-term growth story with tangible momentum across multiple product categories including SASE, cloud security, and more recently, endpoint / EDRand SIEM. Ultimately, with well over $10B in billings in F24, ~20% annual growth, and margins in the high 30’s (almost rule of 60), PANW is emerging as one of the most iconic companies across all of software," the analysts said.
Deutsche Bank analysts also hiked the PT to $270.
"It turns out our call for a possible transition away from hardware was unnecessary as the company put up impressive F4Q results and multi-year guidance without the need for any unusual theatrics; no management change, no M&A, no strategic pivots, and importantly no guide down on growth or FCF margin. The summer-Friday-evening event will forever remain mysterious, but the market looks forward with the greatest takeaway being PANW outshining comps and proving itself a true AI-infused cyber platform for the Enterprise—well beyond the firewall for which it is best known."
Additional reporting by Senad Karaahmetovic