Cybersecurity giant Palo Alto Networks 
PANW plans to release earnings next Tuesday (May 20) at a time when the stock has gained more than 30% since just April 7. Let’s check out the stock’s fundamental and technical picture heading into the results.
Palo Alto Networks’ Fundamental Analysis
PANW has benefited in recent weeks from Wall Street’s view that cybersecurity is one area that could avoid serious impacts from the still-unresolved global trade wars.
Many also think the sector could benefit from potentially inelastic long-term demand going forward.
In fact, 28 of the 35 sell-side analysts that cover the stock have increased their earnings estimates since the current quarter began.
All in, Wall Street was looking at last check for Palo Alto Networks to report $0.77 of fiscal Q3 adjusted earnings per share on roughly $2.3 billion of revenue.
That would compare unfavorably to the $1.33 in adjusted EPS that Palo Alto Networks reported in the same period last year, but would reflect a 15% increase from Q3 2024’s roughly $2 billion of revenues.
Beyond the headline numbers, one item that investors will closely watch will be what PANW reports for Next Generation Security annually recurring revenue (or “ARR”).
Back in February, the firm projected $5.03 billion to $5.08 billion for this metric and $13.5 billion to $13.6 billion in remaining performance obligation.
Palo Alto Networks’ Technical Analysis
Now let’s look at PANW’s chart going back roughly six months and running through Wednesday:
Readers will first see that the stock recently came out of a so-called “double top” pattern of bearish reversal, as denoted with the two red boxes marked “Top 1” and “Top 2.”
However, that pattern appears to have run its course with a sell-off that culminated in early April.
Since then, Palo Alto Networks has rallied into what looks to me like a so-called “rising wedge” pattern, marked with a green box above. Unfortunately, for PANW investors, that’s also traditionally a pattern of bearish reversal.
Does that mean PANW’s price should fall from here? Going into earnings, that's a tricky question.
The shares are trading above their 200-day Simple Moving Average (the red line above), their 50-day SMA (the blue line) and their 21-day Exponential Moving Average (the green line).
That traditionally would keep swing traders and portfolio managers invested in the stock going into next week’s earnings report. But what comes out of those earnings and whatever guidance the company provides could be another story.
Meanwhile, PANW’s Relative Strength Index (the gray line at the chart’s top) is better than neutral, but seems to be declining.
That said, the stock’s daily Moving Average Convergence/Divergence indicator (or “MACD,” denoted by the black and gold line and blue bars at the chart’s bottom) looks like it’s in good shape.
The histogram of Palo Alto Networks’ 9-day EMA is in positive territory, while the 12-day EMA is riding above the 26-day EMA. Both of those lines are also in positive territory. Many would view all of that as a bullish set-up.
Add it all up and whatever guidance the company issues next week will very likely be what either pushes capital into PANW or pulls it out.
The stock’s upside pivot in the chart above is its $208 February high, while PANW’s downside pivot is its 200-day SMA at $181.20. When a stock’s 200- and 50-day SMAs run close together, the 200-day SMA historically takes precedence.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in PANW at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
PANW plans to release earnings next Tuesday (May 20) at a time when the stock has gained more than 30% since just April 7. Let’s check out the stock’s fundamental and technical picture heading into the results.Palo Alto Networks’ Fundamental Analysis
PANW has benefited in recent weeks from Wall Street’s view that cybersecurity is one area that could avoid serious impacts from the still-unresolved global trade wars.
Many also think the sector could benefit from potentially inelastic long-term demand going forward.
In fact, 28 of the 35 sell-side analysts that cover the stock have increased their earnings estimates since the current quarter began.
All in, Wall Street was looking at last check for Palo Alto Networks to report $0.77 of fiscal Q3 adjusted earnings per share on roughly $2.3 billion of revenue.
That would compare unfavorably to the $1.33 in adjusted EPS that Palo Alto Networks reported in the same period last year, but would reflect a 15% increase from Q3 2024’s roughly $2 billion of revenues.
Beyond the headline numbers, one item that investors will closely watch will be what PANW reports for Next Generation Security annually recurring revenue (or “ARR”).
Back in February, the firm projected $5.03 billion to $5.08 billion for this metric and $13.5 billion to $13.6 billion in remaining performance obligation.
Palo Alto Networks’ Technical Analysis
Now let’s look at PANW’s chart going back roughly six months and running through Wednesday:
Readers will first see that the stock recently came out of a so-called “double top” pattern of bearish reversal, as denoted with the two red boxes marked “Top 1” and “Top 2.”
However, that pattern appears to have run its course with a sell-off that culminated in early April.
Since then, Palo Alto Networks has rallied into what looks to me like a so-called “rising wedge” pattern, marked with a green box above. Unfortunately, for PANW investors, that’s also traditionally a pattern of bearish reversal.
Does that mean PANW’s price should fall from here? Going into earnings, that's a tricky question.
The shares are trading above their 200-day Simple Moving Average (the red line above), their 50-day SMA (the blue line) and their 21-day Exponential Moving Average (the green line).
That traditionally would keep swing traders and portfolio managers invested in the stock going into next week’s earnings report. But what comes out of those earnings and whatever guidance the company provides could be another story.
Meanwhile, PANW’s Relative Strength Index (the gray line at the chart’s top) is better than neutral, but seems to be declining.
That said, the stock’s daily Moving Average Convergence/Divergence indicator (or “MACD,” denoted by the black and gold line and blue bars at the chart’s bottom) looks like it’s in good shape.
The histogram of Palo Alto Networks’ 9-day EMA is in positive territory, while the 12-day EMA is riding above the 26-day EMA. Both of those lines are also in positive territory. Many would view all of that as a bullish set-up.
Add it all up and whatever guidance the company issues next week will very likely be what either pushes capital into PANW or pulls it out.
The stock’s upside pivot in the chart above is its $208 February high, while PANW’s downside pivot is its 200-day SMA at $181.20. When a stock’s 200- and 50-day SMAs run close together, the 200-day SMA historically takes precedence.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in PANW at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.