Scalper1 News
Palo Alto Networks ( PANW ) last quarter again nabbed market share from rivals Cisco Systems ( CSCO ), Check Point Software Technologies ( CHKP ) and Juniper Networks ( JNPR ), a Piper Jaffray analyst wrote Monday ahead of Palo Alto’s fiscal Q2 earnings late Thursday. In a survey of third parties selling Palo Alto products, half said Palo Alto is most consistently beating out Check Point, Piper Jaffray’s Andrew Nowinski wrote in a research report. “Cisco, Check Point and Juniper have consistently been called out by resellers as the vendors most frequently losing to Palo Alto,” he wrote. “These are also the top vendors in the firewall market, suggesting Palo Alto continues to gain share at the expense of all the major vendors in the space.” That’s sure to rile Cisco, which last week unveiled a next-generation firewall in direct competition with Palo Alto, Check Point, Fortinet ( FTNT ) and Intel ( INTC )-owned McAfee. It was also the first time that Check Point was cited as the vendor Palo Alto beats most often, Nowinski wrote. Nowinski retained his rating on Palo Alto Networks stock to overweight, with a 208 price target. At least three other analysts, however, cut their price target on Palo Alto stock Monday ahead of the Thursday earnings report. Sales, EPS Seen Decelerating Palo Alto stock was up 1% in afternoon trading on the stock market today , but rival FireEye ( FEYE ) was up 9%. FireEye announced Hewlett Packard Enterprise ( HPE ) as its global alliance partner of the year. For fiscal Q2 ended in January, Palo Alto Networks is expected to report $318.3 million in sales and 39 cents earnings per share ex items, up 46% and 105%, respectively, vs. the year-earlier quarter. It would be its first quarter eclipsing the $300 million-mark. But sales and EPS minus items are expected to decelerate for the second consecutive quarter, according to the consensus of 40 analysts polled by Thomson Reuters. The consensus model is in line with Palo Alto’s earlier guidance for $314 million to $318 million and 38 cents to 39 cents. Palo Alto stock is down 28% this year, slightly worse than IBD’s 25-company Computer-Software Security industry group, which is 24% off its 2015 closure. Cybersecurity stocks were pounded in January on a perceived slowdown in spending after gloomy reports from firms like Tableau Software ( DATA ) and LinkedIn ( LNKD ). Neither Nowinski nor Dougherty analyst Catharine Trebnick see that slowdown for Palo Alto. Trebnick maintained her buy rating and 215 price target on Palo Alto stock. She urged investors to compare Palo Alto to direct next-generation firewall vendors. Firewall Vendors Outperform Peers Barracuda Networks ( CUDA ), CyberArk Software ( CYBR ), Proofpoint ( PFPT ), Imperva ( IMPV ), Rapid7 ( RPD ), Qualys ( QLYS ), Splunk ( SPLK ) and FireEye “have provided a seemingly negative read-through for Palo Alto Networks,” Trebnick wrote in a research report. “Unlike elsewhere in security, next-generation firewall vendors that cater to enterprises have all managed to produce good enough results for investors.” Trebnick expects Palo Alto to beat consensus expectations. Wildfire and Traps are driving higher attach rates, she wrote. Wildfire is Palo Alto’s cloud-based malware-analysis system, which competes with FireEye. Traps is an endpoint-security product. Over the past 12-16 months, Palo Alto has expanded its suite of products to seven from four, Trebnick wrote. Together, Palo Alto touts them as a “next-generation security platform.” “Our sources have indicated that they are now seeing increased success from this approach as enterprises are broadening their purchases to include more of the auxiliary software subscriptions,” she wrote. Trebnick and Nowinski alike see a strong April-quarter pipeline for Palo Alto. Nowinski said he expects a 3%-4% upside to Q3 guidance despite typical seasonal weakness. Scalper1 News
Scalper1 News