by Ian Harvey
August 07, 2019
Palo Alto Networks share price surged 5.8% on Thursday after reporting earnings. Palo Alto projected better-than-expected billings and revenue growth through 2022. “Earnings Predictions” Members make 110% potential profit with an Option Call.
A NICE POTENTIAL PROFIT FOR THE WEEK!
Palo Alto Networks Inc. (NYSE:PANW), a cyber-security company, reported earnings after the market closed on Wednesday, September 04, 2019.
Palo Alto earnings rose nearly 15% to $1.47 a share, with revenue rising 22% to $805.8 million.
Analysts expected Palo Alto earnings of $1.42 a share on sales of $802.4 million for the period ended July 31. The company said billings, a sales growth metric, rose 22% to $1.057 billion, topping estimates of $995 million.
The impressive results were mainly driven by several deal wins and the increasing adoption of the company’s next-generation security platforms. Growing traction in newer Prisma and Cortex offerings was another tailwind.
In addition, Palo Alto said it acquired startup Zingbox for $75 million.
The stock initially dropped after the fourth-quarter print despite results that beat Street expectations. But it bounced back in after-hours trading and continued to trade up Thursday as several analysts continued to recommend the stock.
Why the Initial Call Trade on Palo Alto Networks?
As explained in the information provided to “Earnings Predictions” Members……
....."Over the last four quarters, the company has beaten consensus EPS estimates four times.
Palo Alto's customer base has been swelling at a nice pace. The company exited the fiscal third quarter with around 62,000 customers as compared to 51,000 customers in the prior-year period. The fact that the company's revenue grew at a faster pace than the jump in its customer base indicates that users are spending more money on its products and services.
As well, the lifetime value of Palo Alto's top 25 customers jumped 35% annually in the most recent quarter.
The acquisitions of Twistlock and PureSec give the company access to the fast-growing markets of container security and serverless cybersecurity.
These acquisitions will bring new cross-selling opportunities to Palo Alto, which should lead to higher customer spending and boost the company's top and bottom lines....."
Therefore, advising members to consider buying this.....
.....Options trade: Buy the PANW SEP 20 2019 210.000 CALL at approximately $6.75 (which was actually bought for $5.00).
YOU NEED TO BE IN TO PROFIT!
Moving Forward for Palo Alto Networks
During its analyst meeting, Palo Alto Networks guided for October quarter revenue to be up 16% to 17% and (with spending related to recent acquisitions acting as a headwind) EPS to be in a range of $1.02 of $1.04, which was below consensus estimates for 20% revenue growth and EPS of $1.33.
The company's fiscal 2020 revenue guidance is stronger: It's for 19% to 20% growth versus a consensus of 19%. Palo Alto is also guiding for billings to be up 17% to 19% in fiscal 2020, which is above a consensus for 16% growth. However, thanks to acquisition-related spending, EPS guidance of $5.00 to $5.10 is below a $6.26 consensus.
But while Palo Alto's fiscal 2020 outlook is a mixed bag, the company's three-year guidance -- shared in its analyst meeting presentation -- is getting plenty of backing. Against a backdrop of a strong IT security spending environment, the company forecast that both its revenue and billings would see a 20% compound annual growth rate (CAGR) from fiscal 2019 to fiscal 2022.
Where to Now?
Analysts have been quick to recognise that Coupa Software is going places, with no fewer than seven raising their COUP price targets…..
Analyst reaction has been swift, though not all of the action has been bullish. While Evercore ISI and J.P. Morgan Securities raised their respective price targets to $300, price-target cuts came through at RBC (to $280) and BMO (to $245).
Other analysts’ input…..
Overall, 23 of 28 analysts maintain a "buy" or better rating on PANW, while the average 12-month price target of $264.18 is a 22.5% premium to current levels.
According to Palo Alto Networks’ fourth-quarter earnings presentation, the cloud security market is expected to grow at a CAGR of 21.2% from 2018 to 2022. According to Goldman Sachs Global Investment Research, the public cloud disruption opportunity could exceed $850 billion in 2022 and about $1 trillion in 2023. Plus, Palo Alto Networks expects the cloud security market to grow in line with the overall public cloud market.
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
What Can You Do?
Based on analysts’ optimism for Palo Alto Networks, this far-reaching earnings report, and the positive factors already mentioned, it is expected that the share price will likely continue on its upward trajectory.
Therefore, if you agree with this scenario consider the following options trade…..
.....Buy the PANW JAN 17 2020 230.000 CALL at approximately $10.00.
PATIENCE PAYS OFF!
If you are not a member and are interested in being part of this profitable action just CLICK HERE.
AS ALWAYS THE DECISION IS YOURS!
OR other memberships.....CLICK HERE......
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!