Palo Alto Networks falls on disappointing billings guidance
Will Palo Alto's Low Billings Sink Its Stock?
Palo Alto Networks reported fiscal third quarter results that exceeded Wall Street estimates, with adjusted earnings per share of $1.32 and revenue of $2.0 billion. However, the company's stock fell due to a disappointing billings forecast for the fiscal fourth quarter, projecting $3.43 billion to $3.48 billion, which is below analyst expectations. Full-year revenue guidance was raised to $7.99 billion to $8.01 billion, slightly above estimates.
What concerns were raised by analysts regarding the billings as a key indicator of Palo Alto Networks' business health?
Analysts were concerned about the disappointing billings forecast for Palo Alto Networks. The company's billings guidance for the fiscal fourth quarter was below analysts' estimates, with a range of $3.43 billion to $3.48 billion, compared to the estimated $3.47 billion. This raised concerns as billings are considered a key indicator of the health and visibility of the company's business, particularly if sales of subscriptions continue to increase and the company experiences strong renewal rates for subscriptions and support.
How does the reported Q3 adjusted earnings per share compare to the estimated earnings per share?
Palo Alto Networks reported an adjusted earnings per share (EPS) of $1.32 for the fiscal third quarter, which exceeded the estimated EPS of $1.26 set by Wall Street analysts. This indicates that the company performed better than expected in terms of profitability per share for that quarter.