This AI Stock Darling crashed almost 20% just because it reports earnings on Friday afternoon

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Cybersecurity agency Palo Alto Networks has drawn the ire of analysts in current weeks over its resolution to report earnings after the market closed on Friday, prompting a big sell-off amid hypothesis about the reason for the unusual timing.

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Since Palo Alto’s Aug. 2 announcement when it stories quarterly outcomes, its inventory is down 19%, down 2% to a 2.5-month low of $204 early Friday.

A lot deeper than the high-tech Nasdaq’s lack of 8% over the interval, Palo Alto’s slide has worn out $15 billion from market cap.

What was behind the traditionally uncommon choice to report earnings late on a summer season Friday is up for debate, however most analysts agree it was odd.

Deutsche Financial institution’s Brad Zelnick known as the occasion “uncommon”, Rosenblatt’s Katherine Trebnick known as it “weird” and Wedbush’s Dan Ives declared the choice among the many “greatest PR disasters and black-eyes” he has witnessed whereas overlaying expertise this millennium.

Zelnick earlier predicted that the upcoming earnings name, which is able to run from 4:30 PM to six:30 PM ET, “might be superb” that features the announcement that Palo Alto will exit the {hardware} enterprise that accounts for 22% of its $1.7 billion in gross sales. final quarter {dollars}.

However in an announcement emailed to ForbesThe admittedly “uncommon” timing “got here merely on our schedule and logistical challenges with a lot data to share,” Palo Alto spokeswoman Nicole Hawken mentioned, noting Palo Alto’s busy schedule this month and a willingness to offer analysts “time to devour information.”


Regardless of the malaise, analyst sentiment towards shares uncovered to AI stays robust. The typical value goal for Palo Alto is $257, in response to a ranking of 42 analysts tracked by FactSet, which suggests an upside of about 25%. Palo Alto shares are nonetheless up 48% year-to-date, which places them within the high 20 performers within the S&P 500.

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“Worry the worst and hope for the perfect at this Friday evening Twilight Zone convention … which has turn out to be the TV present within the cybersecurity trade and tech investor neighborhood over the previous few weeks,” Ives wrote to shoppers on Wall Avenue. Nonetheless, Wedbush’s $290 value goal for Palo Alto stays among the many most bullish calls of any firm overlaying Silicon Valley.

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This would be the first earnings report from a element of S&P launched on a Friday afternoon since December 2020, according to MarketWatch. Trebnick famous that it final reported earnings on Friday in 2018.

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