Palo Alto Networks (NASDAQ:PANW) Earnings Preview: What to Expect

• Analysts predict an EPS of $0.77 and revenue of $2.28 billion for the upcoming quarterly earnings.
• PANW has a 70% chance of a positive one-day return post-earnings, with a historical median return of 7.4%.
• The stock is rated as a "buy" by 11 out of 18 analysts, with an average price target indicating an 8% potential upside.

Palo Alto Networks (NASDAQ:PANW) is a leading cybersecurity company known for its advanced security solutions. The company is set to release its quarterly earnings on Tuesday, May 20, 2025. Analysts predict earnings per share (EPS) of $0.77 and revenue of approximately $2.28 billion. Historically, PANW has shown positive stock movement post-earnings, with a 70% chance of a positive one-day return.

The stock's historical performance is noteworthy for event-driven traders. Over the past five years, PANW has seen a median positive return of 7.4% and a maximum one-day positive return of 18.6% following earnings announcements. This trend suggests potential opportunities for traders to capitalize on the stock's movement by taking positions before the earnings release.

Analysts are optimistic about PANW's performance, with 11 out of 18 analysts rating it as a "buy" and the rest as "hold," according to Visible Alpha. The average price target is approximately $209, indicating an 8% potential upside from the recent closing price of just under $193. Jefferies analysts have raised their price target to $225, expecting strong growth despite macroeconomic challenges.

PANW's anticipated EPS of $0.77 for the quarter ending April 2025 marks a 16.7% increase from the previous year. Revenue is expected to rise by 14.6% to $2.27 billion. Despite a slight 0.1% downward revision in the EPS estimate over the past 30 days, the stock's short-term price performance often correlates with earnings estimate trends, making it a key factor for investors to consider.

Palo Alto Networks has a high price-to-earnings (P/E) ratio of 101.79, reflecting its high valuation relative to earnings. The price-to-sales ratio is 14.96, and the enterprise value to sales ratio is 14.81, indicating investors' willingness to pay a premium for the company's sales. With a debt-to-equity ratio of 0.14, PANW maintains a low level of debt, though its current ratio of 0.84 suggests potential challenges in covering short-term liabilities.