Palo Alto Networks surges 19% on strong 4th-quarter earnings as cybersecurity sector booms
By: Business Insider
August 24, 2021 at 13:01 PM EDT
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Shares of Palo Alto Networks surged to an all-time high after the cybersecurity firm reported fourth-quarter earnings that beat estimates and boosted its forecast for 2022 amid a growing number of cyberattacks against US companies.
Palo Alto Networks stock jumped nearly 19% to an intraday high of $443.51 on Tuesday. It was trading 18% higher at $442.65 as of 11:50 a.m. ET.
The company posted a profit of $1.60 per share compared to $1.44 expected by analysts, according to Refinitiv, and revenue of $1.22 billion compared to the $1.17 billion expected.
The revenue of the Santa Clara, California-based firm, meanwhile, grew 28% in the quarter ending July 31, compared to 24% in the previous quarter.
"We've had a series of cybersecurity events over the last quarter, against the backdrop where we've seen supply chain attacks where bad actors try to hack into core infrastructure pieces, which allows them access to enterprises or government systems," Nikesh Arora, company chairman and CEO, said during the earnings call. "The ransomware threat continues to rise."
The Santa Clara, California-based firm also predicted its revenue to rise in the range of $5.275 billion to $5.325 billion in 2022, representing a 24% to 25% year-on-year growth.
Due to the rise in ransomware attacks, Arora said Palo Alto Networks currently has around 300 more ransomware readiness assessments in the pipeline in addition to the 39 it was already engaged in.
"Over time, we expect these service engagements to allow us to increase our product pull-through to our customers," he said during the call. "As a company, we've continued to focus on getting more presence in our customers and getting larger deals with them."
Ahead, supply chain constraints might factor into the third or fourth fiscal quarter of next year, according to Arora. This is why, he said, Palo Alto Networks is increasing the prices of its hardware products, though only by a small amount.