Palo Alto Networks (PANW) stock up after earnings report

Shares of Palo Alto Networks rose 12% in pre-market trading Monday, continuing a rally that began when the security software vendor reported stronger than expected fiscal fourth quarter earnings last week.

The company reported adjusted quarterly earnings per share of $1.44 versus a Refinitiv analyst consensus of $1.28 per share. While Palo Alto missed consensus estimates for revenue, which came in at $1.95 billion versus $1.96 billion for the quarter ended July 31, the company said that revenue increased 26% compared to the year-ago quarter.

There had been some concern among analysts that Palo Alto was slated to report bad news alongside its earnings, since it scheduled its earnings release date for after the bell Friday. Historically, it’s a scheduling slot sometimes adopted by companies with poor numbers to report. As a result, Palo Alto stock fell as far as $208.02 after it announced its earnings release date.

The pre-market rally means that Palo Alto’s shares have largely recovered from the plunge. Palo Alto CEO Nikesh Arora described the pre-earnings concern as making for “some very interesting reading” in analyst reports.

By Sunday evening, those concerns had also evaporated. Deutsche Bank analyst Brad Zelnick reiterated a Buy rating on the stock and took his price target from $225 to $270.

“Our call for a possible transition away from hardware was unnecessary as the company put up impressive F4Q results and multi-year guidance without the need for any unusual theatrics; no management change, no M&A, no strategic pivots, and importantly no guide down on growth,” Zelnick wrote in a Sunday note to clients.

In a note to clients Monday morning, Bank of America analyst Tal Liani noted that “the company’s focus on profitability and better cost controls helped drive a 16c beat to consensus’ $1.28.”

Bank of America took its price target from $270 to $290, writing that both guidance and results “were better-than-expected given the unconventional timing of the earnings release.”

WATCH: Palo Alto’s surge in product growth underdoing digestion, analyst says