NEW YORK (TheStreet) -- Shares of Palto Alto Networks (PANW) were increasing in late morning trading on Tuesday as Davidson trimmed its outlook ahead of the company's 2016 fourth quarter earnings due out after today's market close.
The firm now expects the Santa Clara, CA-based network and enterprise security company's fourth quarter revenue to grow year-over-year to $386.9 million, compared to its prior estimate of $393.1 million.
Palo Alto Networks projects revenues of $386 million to $390 million for the quarter.
Davidson also projects billings of $587.8 million, or an increase of 49% year-over-year, and earnings of 48 cents per share.
Last year, the company posted adjusted earnings of 28 cents per share on $283.9 million in revenue for the fourth quarter.
Palo Alto Networks' biggest strengths lie in its "enthusiastically endorsed" cloud strategy, which the firm said is able to quickly defend against attackers methods that change "almost on an hourly basis" as well as meet the needs of companies who require a speedy system.
Davidson added that Palo Alto Networks top line is immune to macroeconomic volatility because the majority of its accounts are based in the U.S.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings rates Palo Alto Networks as a Sell with a ratings score of D. This is driven by some concerns, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks the team covers. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: