Palo Alto Networks' (PANW) first-quarter results are expected to show that despite weakness last quarter for the group and weak results from Fortinet, the cybersecurity group is getting stronger.
"We see limited signs of spending deterioration from Q2 vs. consensus looking for slowing growth Q3 - framing an easier set up for the best-positioned names, like PFPT and PANW," Morgan Stanley analyst Melissa Gorham wrote in a note to clients.
Analysts compiled by Yahoo! Finance expect the cyber security software company to earn 53 cents a share on $400.2 in revenue.
These three ETFs may benefit if Palo Alto Networks shows good results and guidance is strong.
iShares North American Tech-Multimedia Networking ETF
The iShares North American Tech-Multimedia Networking ETF (IGN) has Palo Alto Networks make up 9.09% of its $95.3 million portfolio and charges investors a 0.47% expense ratio.
Morgan Stanley's Gorham noted that the company's free cash flow growth should continue throughout the rest of the calendar year, something that's not reflected in the stock.
Gorham rates Palo Alto shares overweight with a $146 price target.
First Trust Nasdaq Cybersecurity ETF
Palo Alto makes up 6.69% of the First Trust Nasdaq Cybersecurity ETF (CIBR) , which has $107.5 million in assets under management and has a 0.6% expense ratio.
Oppenheimer analyst Shaul Eyal believes that after checking with clients, Palo Alto's high-end appliances, or software are gaining traction. "SaaS-based subscription services, such as Traps and VM-Series, continue to see solid momentum with both new and existing customers," Eyal wrote to clients. "Americas remain strong while EMEA productivity seems to be improving."
Eyal has a outperform rating and a $184 price target on shares.
PureFunds ISE Cyber Security ETF
The PureFunds ISE Cyber Security ETF (HACK) has Palo Alto make up 4.65% of its $763.6 million portfolio and charges investors a 0.75% expense ratio.