Benzinga | Feb 19, 2021 10:42AM EST

Earnings Outlook for Palo Alto Networks

Palo Alto Networks (NYSE:PANW) will be releasing its next round of earnings this Monday, February 22. For all of the relevant information, here is your guide for Monday's Q2 earnings announcement.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Palo Alto Networks EPS will likely be near $1.43 while revenue will be around $985.56 million, according to analysts. In the same quarter last year, Palo Alto Networks reported earnings per share of $1.19 on revenue of $816.70 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to report earnings in line when it publishes results Monday, earnings would be up 20.17%. Revenue would be up 20.68% on a year-over-year basis. Here is how the company's EPS has stacked up against analyst estimates in the past:

Quarter Q1 2020 Q4 2020 Q3 2020 Q2 2020EPS Estimate 1.33 1.39 0.93 1.12EPS Actual 1.62 1.48 1.17 1.19Revenue Estimate 921.64 M 923.51 M 829.48 M 843.26 MRevenue Actual 946.00 M 950.40 M 869.40 M 816.70 M

Stock Performance

Shares of Palo Alto Networks were trading at $391.13 as of February 18. Over the last 52-week period, shares are up 67.82%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Palo Alto Networks is scheduled to hold the call at 16:30:00 ET and can be accessed here.