Palo Alto (PANW) Beat Unimpressive, Lock-Up Expiration Looms
On Thursday, Palo Alto Networks (NYSE: PANW) reported Q1 earnings that topped estimates. It also reported guidance that was above the Street. Investors reacted to the positive results by sending shares lower by 5 percent. What gives?
In the view of Nomura analyst Frederick Grieb, Palo Alto results simply weren't good enough.
"We believe the company needed to post a more significant beat and raise on the quarter in order to get the stock to move higher," said Grieb.
Grieb also warned investors about a pending lockup expiration that will free up a significant number of shares in mid-January.
"In conjunction with Palo Alto's July IPO, shareholders who did not sell their shares in the IPO were subject to lockup agreements. A substantial number of these shares will become eligible for sale in mid-January, potentially putting selling pressure on the stock," stated the analyst.
Despite ongoing market share gains, some investors think Palo Alto Networks valuation has become stretched.
Nomura Securities has a Neutral rating on Palo Alto Networks (NYSE: PANW) and a price target of $60.00.
For an analyst ratings summary and ratings history on Palo Alto Networks click here. For more ratings news on Palo Alto Networks click here.
Shares of Palo Alto Networks closed at $51.30 yesterday, with a 52 week range of $50.01-$72.61.
In the view of Nomura analyst Frederick Grieb, Palo Alto results simply weren't good enough.
"We believe the company needed to post a more significant beat and raise on the quarter in order to get the stock to move higher," said Grieb.
Grieb also warned investors about a pending lockup expiration that will free up a significant number of shares in mid-January.
"In conjunction with Palo Alto's July IPO, shareholders who did not sell their shares in the IPO were subject to lockup agreements. A substantial number of these shares will become eligible for sale in mid-January, potentially putting selling pressure on the stock," stated the analyst.
Despite ongoing market share gains, some investors think Palo Alto Networks valuation has become stretched.
Nomura Securities has a Neutral rating on Palo Alto Networks (NYSE: PANW) and a price target of $60.00.
For an analyst ratings summary and ratings history on Palo Alto Networks click here. For more ratings news on Palo Alto Networks click here.
Shares of Palo Alto Networks closed at $51.30 yesterday, with a 52 week range of $50.01-$72.61.