Like so many other tech stocks, Palo Alto Networks (PANW) went on a tear throughout 2018 followed by an autumn slump: the cybersecurity unicorn's stock has sagged 25% since the beginning of October.

With Palo Alto Networks reporting its latest earnings on Thursday, Nov. 29, investors are on the lookout for what's next at the network security firm. The global market for network security solutions is expected to grow by 4.74% annually according to a report by Radiant Insights -- and Palo Alto Networks aims to further entrench a leading position in the space.

The company is expected to report earnings of $1.05 a share on sales of $632.1 million for the latest quarter, based on a FactSet survey of 36 analysts. In the same period a year ago the company posted earnings of 74 cents a share on sales of $505.5 million.

An Aggressive Shift to the Cloud

The cybersecurity firm underwent a changing of the guard this year, with CEO and chairman Nikesh Arora -- a former top exec at Alphabet and Softbank -- replacing outgoing CEO Mark McLaughlin in June. Earlier this month, Amit Singh, a longtime leader at Oracle, was named President. The leadership shift was interpreted by Morgan Stanley analysts as accelerating Palo Alto Networks' shift to cloud security: "Mr. Singh's unique background with experience in both high performances enterprise selling (20 years at Oracle) and scaling emerging Cloud business (Google Cloud) should help accelerate Palo Alto Network's cloud transition," the analysts wrote.

So how's that shift going? On Thursday, investors will have an opportunity to dig deeper into PANW's product portfolio -- and how some of the finer details will affect the stock's prospects: "We also note that the firewall refresh (~every 5 years) and high attach rates remains a key variable at the center of the bull/bear debate on this name in terms of the timing of these upgrades," wrote Wedbush's Dan Ives in a recent note.

Application Framework Intrigue

In Palo Alto Networks' September earnings call, its recently launched Application Framework -- a cloud-based infrastructure suite for security -- was a topic of great interest as the company aims to strengthen its customer base of approximately 50,000. On the September call, Arora didn't lay out any specific milestones or KPIs that would illustrate the success of the product, which launched last year. But executives stressed that the new framework represents the future for the cybersecurity player: "App Framework is definitely the long-term direction both for us and for the industry," he said. "At the same time, obviously, we want the Application Framework to be useful for other third-parties. So, the more third-party players we can get to adopt our model, the more we can get our products to work together and more we can provide customers the opportunity to be able to see how to look at their threats, how to look at their security posture across multiple parts of their infrastructure, to us that is a win." On Thursday, investors may be on the lookout for signals on how the framework is performing.

Rising Competition from Cisco

Palo Alto Networks is regarded as a leader in network security, but it's not the only player. As many analysts have noted, networking stalwart Cisco (CSCO) may have the ability -- given its large existing customer base and deep pockets -- to snatch market share from the younger upstart. Observers of cybersecurity stocks have debated whether the old-guard networking firm, or pure security player Palo Alto Networks, is a better bet for investors. For Palo Alto Networks, one means of strengthening its position may be through acquisitions -- another subject of intrigue on the company's September earnings call, which was also the first for new chief Arora. Since then, Palo Alto Networks snapped up Redlock, a cloud threat defense company, for $175 million. On Thursday, investors may probe what the role of M&A will be in Palo Alto Network's plan for dominance.

PANW and CSCO are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.

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