Updated Palo Alto Networks ( PAN ) is facing a proposed class action that claims investors were misled about the traction of its platform tactics and hurt by an unexpectedly low billings forecast that crashed its stock price.
Palo Alto investors sue over 28% stock drop #sysadmin
The US security industry last week reported a 19 percent increase in sales to $1.975 billion for the second quarter ended Jan. 31, and a net profit of $1.476 billion thanks to a tax benefit. So far so good, until it came to forecasts for the next three months.
For the third quarter of PAN's 2024 fiscal year, it provided guidance that total billings are estimated to be between $2.3 billion to $2.35 billion, which if accurate would represent 2-4 percent year-over-year growth. This was due to "softness" in federal government spending.
Investors didn't like what they saw, and the share price subsequently fell $104.12 – or 28.4 percent.
