Palo Alto Networks Inc. (PANW) - Get Report shares traded sharply higher Thursday after the cybersecurity group posted stronger-than-expected fourth-quarter earnings and forecast a robust near-term outlook for its key product suite.

Palo Alto said adjusted earnings for the three months ending in July, the company's fiscal fourth quarter, came in at $1.47 per share, up 9.7% from the same period last year and 5 cents ahead of the Street consensus forecast. Group revenues also impressed, rising 22.4% to $805.8 million, again topping analysts' estimates of an $802.4 million tally.

During an investor event that followed the earnings release, Palo Alto said it can achieve a compounded annual growth rate of 20% for both billings and revenues from its cloud-based security products, noting it sees free cash flow of around $4 billion for 2022. However, it also cut it free flow margin forecast for the 2020 fiscal year to 30% from 37% and sees overall first quarter revenues slipping to between $760 million and $770 million.

"We had a strong fourth quarter, surpassing a billion dollars in billings within the quarter for the first time, and achieving approximately 180% year-over-year growth in our newer Prisma and Cortex offerings," said CEO Nikesh Arora. "This year we acquired and released important new technologies and built a robust go-to-market framework for driving their success in the market. It's gratifying to see all the team's hard work translate into strong market results."

Palo Alto shares were marked 7.8% higher at the start of trading Thursday to change hands at $216.16 each, a move that would lift the stock into positive territory for the second half of the year.

"While an in-line quarter and a lower guided F1Q are overshadowed by a better than forecast (free cash flow) expectation and solid (long term) guidance, the overall business remained healthy," said KeyBanc Capital analyst Rob Owens, who lowered his price target on the stock by $30 to $250 per share. "Despite the clear end of the firewall refresh, the cloud-related businesses are garnering significant momentum."