Palo Alto Networks completely recovered losses of the last thirty days and is so close to heal all of its wounds got in February, when disappointing forward guidance surprisingly derailed the epic climb from below $150 in early 2023 to an all-time high above $380. Slowly and steadily, a terrible technical retracement to $260 was fully recovered. And now the company's share price exceeded $350 after adding more than 5% for less than two days as another radically changed forecast suggested 2024 full-year results to shift previous mentally boundaries above consensus estimates, citing robust cybersecurity features demand against a surge in digital scams, while the July 19 global security outage, linked to CrowdStrike's software update, showed the risks of relying on single-vendor solutions.

Digital threat landscape evolves, Palo Alto CEOs said while now posting its annual sales projections between $9.10 and $9.15 billion, vs Wall St analyst pool's recent estimate of $9.11 billion, with its annual adjusted profit per share in the range of as much as $6.18 to $6.31, compared with previous suggestions of $6.19 per share on the average. Several financial services and investment houses like Stifel rushed to raise their price target for Palo Alto to $385 or even $400 per share on the news. Most of those chameleons quickly dressed up, or one may call it dressed down, by lowering their ratings for the company to Sell during the winter and springtime. Now most of them became optimists again to uphold their Buy ratings on Palo Alto.

Its management is focusing on platformization, which clearly pays off. Its next-generation security products like Cortex (surpassing $900 million in annual recurring revenue), PrismaCloud (collecting more than $700 million) and AI offerings (approaching $200 million) are best sellers. Meanwhile, only forecasts underwent major challenges while Palo Alto's actual financial results were brilliant, perfectly happy growing almost every quarter. Its EPS evolved from slightly above $1 per share in Q1 and Q2 2023 to the sequence of $1.44, $1.38, $1.46, $1.32 in the next four reporting periods, to reach $1.51 in the last quarter.

In each of these cases, corresponding numbers of EPS exceeded consensus estimates. The same mathematical principle applies to the whole set of revenue numbers. This means that all recent imaginary weaknesses of Palo Alto were mostly located inside investors' wavering minds, which were rather coordinated with forecasts' rhetoric than with actual fundamentals. It is unlikely that the market will get into the same vicious circle once again with the same Palo Alto in the course of the same year.