Earnings Previews: Best Buy, Palo Alto Networks and More

After U.S. markets closed Thursday and before they opened Friday, semiconductor equipment maker Applied Materials and farming and heavy equipment maker Deere, respectively, reported quarterly earnings. Both exceeded expectations on the top and bottom lines.

Looking ahead to next week, JD.com and TAL Education are scheduled to report quarterly results before markets open on Monday. Both have felt the pressure from the Chinese government’s crackdown on overseas-listed equities, and TAL just received new instructions on what it must do to change its business.

After markets close Monday, there is just one earnings report of note on the calendar. On Tuesday morning, however, we are looking forward to four reports.

Palo Alto Networks

Palo Alto Networks Inc. (NYSE: PANW) supplies cybersecurity platforms, including both hardware and software, along with subscription and other professional services. Over the past 12 months, the stock has gained about 35%, of which just over 2% can be attributed to 2021. As more people return to their offices over the next year, demand for traditional corporate security services is expected to grow, and that’s good for Palo Alto Networks. The company reports results after markets close Monday.

Analysts are strongly bullish on the stock, with 33 of 37 brokerages giving the shares a Buy or Strong Buy rating. At a price of around $364.90, the stock’s upside potential, based on a median price target of $445, is 22%. At the high price target of $515, the upside potential is 41%.

For its fourth quarter of fiscal 2021, Palo Alto Networks is expected to report revenue of $1.17 billion, which would be up 9.2% sequentially and 23% year over year, and adjusted earnings per share (EPS) of $1.44, or up 4.2% sequentially and down 2.7% year over year. For the full fiscal year, analysts are looking for EPS of $5.99, up 22.7%, and revenue of $4.21 billion, or 23.5% higher.

The company’s stock trades at 60.5 times expected 2021 EPS, 51.0 times estimated 2022 earnings and 41.8 times estimated 2023 earnings. The stock’s 52-week range is $219.34 to $406.92, and Palo Alto Networks does not pay a dividend.

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