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Palo Alto Networks’ Stock Down 8% As Billings Miss Target

The stock of Palo Alto Networks (PANW) is down 8% after the cybersecurity firm reported quarterly billings that missed Wall Street forecasts.

The company’s profit and sales figures narrowly beat analysts' expectations.

Palo Alto Networks reported earnings per share (EPS) of $1.32 U.S., which beat estimates of $1.25 U.S. per share.
Revenue for what was the company’s fiscal third quarter came in at $1.98 billion U.S., which was slightly above analyst expectations of $1.97 billion U.S. Sales were up 15% from a year earlier.

However, the company’s billings for the quarter came in at $2.33 billion U.S., just missing analysts’ average estimate of $2.34 billion U.S., sending the share price lower.

Analysts and investors see the disappointing billing figure as a sign of reduced corporate spending on cybersecurity solutions, creating near-term headwinds for Palo Alto Networks.

Businesses are spending less on cybersecurity as they struggle with continued inflation and an uncertain economic outlook, said the company.

Looking ahead, Palo Alto Networks said that it expects billings in the current quarter of $3.43 billion U.S. to $3.48 billion U.S.

The mid-point of that guidance is inline with Wall Street estimates of $3.45 billion U.S.

For the entire fiscal year, Palo Alto Networks now expects billings in a range of $10.13 billion U.S. to $10.18 billion U.S.

That guidance is slightly lower than a previous range of $10.10 billion U.S. to $10.20 billion U.S.

Before today (May 21), Palo Alto Networks’ stock had risen 69% over the past 12 months and was trading at $323.77 U.S. per share.