Why Is Palo Alto Networks (PANW) Stock Losing Momentum?
Zacks Investment Research | Jun 13, 2016 09:47PM ET
Shares of Palo Alto Networks Inc. (NYSE:PANW) have been losing momentum of late. One of the major reasons behind this could be the company’s wider-than-expected loss during the third quarter of fiscal 2016, along with a discouraging earnings guidance for the fourth quarter.
Notably, the stock has tanked approximately 10% since the announcement of its third-quarter results on May 25. Also, year to date, the stock has lost over 25%.
Although Palo Alto Networks’ revenues came ahead of the Zacks Consensus Estimate and recorded a year-over-year improvement, its bottom-line results were quite dismal.
The company’s adjusted loss (excluding amortization and other one-time items but including stock-based compensation) for the quarter was wider than both the Zacks Consensus Estimate and the year-ago quarter loss. Loss widened mainly due to higher operating expenses, which more than offset the benefits of robust top-line growth.
Weighed down by the dismal bottom-line performance as well as enterprise spending concerns, the company gave a weak guidance for the fourth quarter.
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