Palo Alto Networks (PANW) on Thursday posted a $38.5 million quarterly loss on revenue of $345.8 million and forecast slower growth going forward. The news sent its stock tumbling Friday as shares were trading around $130 by early afternoon, down more than 12%.
"Palo Alto (Networks) talked about actual (macroeconomic) concerns," TheStreet's founder and Action Alerts PLUS portfolio manager Jim Cramer said. "You don't want to hear that when you have a super-high-growth stock. They talked about there was a slowdown, definitively, from a very high level. It made me feel that perhaps cybersecurity is not as much of a growth area as it was."
Mark McLaughlin, CEO of the Santa Clara, Calif.-based cybersecurity provider, explained on the earnings call how the perceived fraught economic environment was affecting Palo Alto Networks' business.
"I think I might use this term volatility as a lot of things that play out there," McLaughlin said. "It ultimately boils down to sentiment (that) ... the customers feel about things. And I think that sentiment in that environment has been cautious from January and it continues to be that case."
Rather than Palo Alto Networks, Cramer likes CyberArk (CYBR) , which reported revenue of $46.9 million in the first quarter, and Fortinet (FTNT) , a Growth Seeker holding, which reported $284.6 million in first-quarter revenue.
"Palo Alto talked about taking customers from somebody else," Cramer said. "All I want to hear about is this green field, there's customers that have no protection. So I understand the stock is down. I prefer CyberArk and Fortinet."