Palo Alto Networks (NASDAQ: PANW), the cybersecurity software group, saw its shares fall roughly 5% yesterday as a broad sell-off in high-valuation tech stocks hit the sector, hours before it reported a Q4 earnings beat and raised its FY2027 outlook.
The stock closed yesterday’s regular session at $362.09, down 5.24% from the prior close of $382.13, having traded between $357.26 and $375.92. That leaves the shares below their 52-week high of $398.88, set in mid-August, though still far above their 52-week low of $139.57.
According to Yahoo Finance, renewed tensions in the Middle East pushed oil prices and global bond yields higher yesterday, dragging down a basket of high-valuation growth and cybersecurity names including Appian, C3.ai, Rapid7 and Shopify alongside Palo Alto, a move that predated the company’s own earnings news. After the close, Palo Alto reported Q4 revenue of $3.41bn, up 34% year-on-year, and non-GAAP earnings per share of $1.02, both ahead of consensus, the average analyst forecast.
The results were driven by Next-Generation Security annual recurring revenue, a measure of subscription income from its newer security platforms, which rose 63% to $9.1bn, with almost $1bn added in the quarter alone. Remaining performance obligations, future contracted revenue not yet booked, hit a record $21.2bn. Palo Alto guided FY2027 revenue to $14.1bn-$14.2bn and non-GAAP earnings per share to $4.16-$4.19, both above Street forecasts, and closed its acquisition of AI-native platform Console to bolster its Cortex security-operations business.
Chairman and chief executive Nikesh Arora said: “We delivered a strong Q4 to close out the year, adding nearly $1 billion of Net New NGS ARR in a single quarter. The latest advancements in AI are elevating cybersecurity to the top of the CIO priority list, and will serve as durable tailwinds as we progress towards our $20 billion FY30 NGS ARR target.”
Despite the beat-and-raise, the after-hours reaction was muted. With the stock still up sharply this year and trading within striking distance of that $398.88 high, even a clean beat left little room to push the shares further.