Cybersecurity provider Palo Alto Networks (NASDAQ:PANW) will be reporting earnings tomorrow after market close. Here’s what investors should know.

Palo Alto Networks met analysts’ revenue expectations last quarter, reporting revenues of $1.98 billion, up 15.3% year on year. It was a mixed quarter for the company, with a narrow beat of analysts’ billings estimates but a decline in its gross margin.

Is Palo Alto Networks a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Palo Alto Networks’s revenue to grow 10.8% year on year to $2.16 billion, slowing from the 26% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.41 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Palo Alto Networks has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 0.6% on average.

Looking at Palo Alto Networks’s peers in the cybersecurity segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Varonis delivered year-on-year revenue growth of 12.9%, beating analysts’ expectations by 4.4%, and Rapid7 reported revenues up 9.2%, topping estimates by 1.9%. Varonis traded up 14.7% following the results while Rapid7 was also up 9.7%.

Read our full analysis of Varonis’s results here and Rapid7’s results here.

Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed inflation signals have led to uncertainty around rate cuts, and while some of the cybersecurity stocks have fared somewhat better, they have not been spared, with share prices down 2% on average over the last month. Palo Alto Networks’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $351.6 (compared to the current share price of $333.81).

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