Shares of cybersecurity firm Palo Alto Networks (NASDAQ:PANW) are little changed in today’s trading as investors await its Q3 earnings results on May 20 after the market closes. Analysts are expecting earnings per share to come in at $1.25 on revenue of $1.967 billion. According to TipRanks’ data, this equates to 13.6% and 14.2% year-over-year increases, respectively.
Ideally, earnings per share should grow faster than revenue as this demonstrates a high degree of operating and financial leverage in the business. Nevertheless, it’s worth noting that Palo Alto has beaten earnings estimates every quarter since its 2020 Q4. Therefore, it’s possible that EPS growth will outpace revenue growth.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a large 10.37% move in either direction.
What Is the Price Target for PANW?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PANW stock based on 29 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 67% rally in its share price over the past year, the average PANW price target of $335.32 per share implies 5.59% upside potential.
