Written by Brenda Nakalema

Palo Alto Network Stock Climbs as Cybersecurity Provider Raises Guidance

Cybersecurity firm Palo Alto shares climbed more than 11% in premarket trading on Friday after the company reported stronger-than-expected results …

Cybersecurity firm Palo Alto shares climbed more than 11% in premarket trading on Friday after the company reported stronger-than-expected results and raised its guidance for the year.

Palo Alto (ticker: PANW) said cyber attacks out of Russia had increased since the invasion of Ukraine, increasing the demand for protection. While shortages of supplies such like chips are destroying margins, the company reported that it’s not feeling pressure on demand from its customers from faster inflation.

The results seem to indicate that companies don’t have reservations about spending money on cybersecurity even as higher energy and food prices affect demand for other things. That brightens the outlook, especially because technology stocks overall are getting hurt by prospects for an economic slowdown and higher interest rates.

It’s also an indication that the war in Ukraine will provide a much-needed boost to computer security providers, despite widespread supply-chain problems. In stark contrast, Cisco (ticker: CSCO), which offers networking parts and services, placed the blame on supply issues for disappointing results this week.

Palo Alto’s examination of its earnings revealed “elevated security awareness, no current pressures from inflation or economic activity, and management actually less worried about budgets now vs during Covid,” said RBC Capital Markets analyst Matthew Hedberg. “The stock remains in front of a number of potential catalysts.”

Shares surged by 11% to $484.69 in premarket trading on Friday. The company reported revenue rising 29% from a year earlier to $1.4 billion. The expectation is that revenue will continue to grow as high as $1.55 billion in the current quarter, or an annual increase of between 25% and 27%.