- Cybersecurity firm to split shares in three
- Outstrips forecasts in Q4, and issues positive guidance
- Stock had traded sideways for last three months
Silicon Valley’s Palo Alto Networks (PANW:NASDAQ) became the latest tech company to announce a stock split to try and lure in retail investors. The cyber security firm plans to push through a three-for-one share split in the form of a dividend, following in the footsteps of Tesla (TSLA:NASDAQ), Alphabet (GOOG:NASDAQ) and Amazon (AMZN:NASDAQ) earlier this year.
Palo Alto Networks said existing shareholders at the close of trading on 6 September 2022 will receive two additional shares for every one owned, with trading in the new adjusted stock to start on 14 September.
RAMPANT Q4 DEMAND
The news followed a blistering fourth quarter (to 31 July) for the company and led to the stock jumping 8% to $551 in after-hours trading. If the stock remained unchanged ahead of the stock split it would imply that investors would get three shares worth roughly $183.67 each for every existing $551 share held.
The Q4 numbers showed EPS (earnings per share) of $2.39 outstripping the $2.28 consensus estimate. Revenue also beat analyst forecasts, surging 27% year-on-year to $1.6 billion, beating the consensus estimate of $1.54 billion as the war in Ukraine thrusts cybersecurity to the top of board agendas.
‘Next-Generation Security growth, driven by our rapid pace of innovation and strong sales execution, drove our results,’ said Palo Alto Networks chief executive Nikesh Arora. ‘As cybersecurity posture remains critical, our integrated three-platform strategy continues to drive large deal momentum as we consolidate and simplify our customers’ security architectures,’ he said.
UPBEAT GUIDANCE
The company expects EPS in Q1 of the year to July 2023 of between $2.03 and $2.06, and revenue in the range of $1.535 billion to $1.555 billion, compared to the consensus estimate of $1.54 billion.
For the full 2023-year, the company expects EPS to be in the range of $9.40 to $9.50, and revenue in the range of $6.85 billion to $6.9 billion, compared to the consensus estimate of $6.74 billion, while Palo Alto’s board also authorised an extra $915 million share repurchase program.
