Please ensure Javascript is enabled for purposes of website accessibility

Why Palo Alto Networks Inc. Stock Fell 18.7% in October

By Steve Symington - Updated Nov 12, 2018 at 9:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cybersecurity leader fell victim to its hefty year-to-date gains, reaction to its reaffirmed guidance, and the broader market's pullback.

What happened

Shares of Palo Alto Networks Inc. (PANW 1.52%) declined 18.7% in October, according to data from S&P Global Market Intelligence, both as the broader market fell and the company reiterated its latest quarterly financial guidance.

With shares already up more than 50% year to date through the first nine months of 2018, roughly half of Palo Alto Networks' drop in October came in the first week of the month -- that is, when major stock market indexes began to pull back from all-time highs led by declines in the tech sector. 

Palo Alto Networks booth at trade show.


So what

Palo Alto Networks shares continued to drift lower to close October after the company reaffirmed its fiscal first-quarter 2019 guidance provided in September. That outlook calls for quarterly revenue in the range of $625 million to $635 million, or year-over-year growth of 26% at the midpoint, with adjusted earnings per share of $1.04 to $1.06.

At the time, however, it appeared the market wanted even more; consensus estimates had predicted earnings and revenue would arrive near the high end of Palo Alto Networks' respective guidance ranges.

Now what

As it stands, Palo Alto Networks is poised to release its final fiscal first-quarter 2019 results on Thursday, Nov. 29, 2018. Barring yet another update between now and then, I suspect the stock will only continue to ebb and flow along with the wider tech sector.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Palo Alto Networks, Inc. Stock Quote
Palo Alto Networks, Inc.
$510.71 (1.52%) $7.64

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.