Palo Alto Networks (PANW) Beats Q2 Earnings and Revenue Estimates

Core Insights - Palo Alto Networks (PANW) reported quarterly earnings of $1.03 per share, exceeding the Zacks Consensus Estimate of $0.93 per share, and showing an increase from $0.81 per share a year ago, resulting in an earnings surprise of +10.67% [1] - The company achieved revenues of $2.59 billion for the quarter ended January 2026, surpassing the Zacks Consensus Estimate by 0.50% and up from $2.26 billion year-over-year [2] Financial Performance - Over the last four quarters, Palo Alto has consistently surpassed consensus EPS estimates, achieving this four times [2] - The current consensus EPS estimate for the upcoming quarter is $0.91 on revenues of $2.6 billion, and for the current fiscal year, it is $3.84 on revenues of $10.53 billion [7] Market Position and Outlook - Despite the positive earnings report, Palo Alto shares have declined approximately 9.4% since the beginning of the year, contrasting with the S&P 500's slight decline of 0.1% [3] - The Zacks Industry Rank indicates that the Security industry is currently in the bottom 16% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] Estimate Revisions and Future Expectations - The trend of estimate revisions for Palo Alto was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - Empirical research suggests a strong correlation between near-term stock movements and earnings estimate revisions, which investors can track [5]