Analysts expect Palo Alto Networks Inc (NASDAQ: PANW) to report fourth-quarter earnings per share of $1.41 on revenue of $2.162 billion Monday after the market closes.
Dan Ives and Wedbush view the company's transition to a platformization strategy as a key business driver, which will be crucial for its growth in FY25 and beyond.
Although this shift presents some near-term challenges, Ives and Wedbush are confident in PANW's long-term potential, maintaining an Outperform rating with a $375 price target.
Wedbush notes the upcoming earnings report may not deliver major surprises, but it will underscore the foundation PANW is building for FY25.
The company's guidance and revenue estimates of $2.16 billion are seen as achievable, with billings expected between $3.43 billion and $3.48 billion.
Wedbush says a key focus will be on the growth of Next-Generation Security (NGS) Annual Recurring Revenue (ARR), which is crucial for reaching PANW's $15 billion ARR target by 2030.
The Street expects FY25 revenues of $9.11 billion, a 14% year-over-year growth, which Ives and Wedbush believe is attainable. Despite some near-term sales headwinds, such as those caused by the recent CrowdStrike outage, PANW is expected to benefit in the long run.
Ives and team continue to view PANW as a top cybersecurity pick for the next 12-18 months.