What happened

Shares of Palo Alto Networks (PANW -1.22%) jumped 11.6% in August, according to data from S&P Global Market Intelligence. The leading global cybersecurity company reported strong fiscal fourth-quarter results last month, leading several analysts to boost their rating on the stock. The company also approved a 3-for-1 stock split.

So what

Palo Alto Networks ended its 2022 fiscal year on a high note. The cybersecurity company's revenue grew 27% year over year in its fiscal fourth quarter to $1.55 billion. That came in at the top end of its $1.53 billion-$1.55 billion guidance range and ahead of the analysts' consensus estimate of $1.54 billion. 

The cybersecurity company also posted expectation-beating adjusted earnings of $2.39 per share. That was well above the top end of its $2.26-$2.29 per share guidance range and the $2.28 analyst consensus. Palo Alto also delivered strong adjusted free cash flow, turning a third of revenue into free cash for the full year. 

Palo Alto Networks also unveiled its fiscal 2023 forecast. The cybersecurity provider expects revenue to rise by more than 25%, with adjusted earnings per share growing by 24% to 26%. Meanwhile, it anticipates its adjusted free cash flow margin will increase from 33.3% to a range of 33.5% to 34.5%. 

The company's strong free cash flow gave the board the confidence to add $915 million to its share repurchase program, boosting the total to $1 billion. The board also authorized a 3-for-1 stock split. The split will make its shares more accessible to employees and other investors. 

Analysts loved what they saw from Palo Alto Networks in the quarter, with several raising their price targets. For example, Barclays analyst Saket Kalia increased the bank's target from $605 to $695 a share following earnings while keeping their overweight rating after it easily beat expectations. Meanwhile, Citi analyst Fatima Boolani raised their price target from $605 to $640 a share while keeping their buy rating. The Citi analyst noted that the company's "cyber platform consolidation strategy is taking a tangible hold." 

Now what

Palo Alto Networks' investments in next-generation security are paying off, helping drive rapid sales and earnings growth. The company is also generating lots of cash, allowing it to continue investing in innovation while returning capital to shareholders through its repurchase program. It expects to continue expanding at a healthy clip, positioning it to grow shareholder value in the coming years.