Palo Alto Networks Inc (PANW) Post-Earnings Surge Lifts Fellow Cybersecurity Stocks

Strong earnings from Palo Alto Networks Inc (NYSE:PANW) is lifting other stocks in the cybersecurity sector

Josh Selway

Feb 26, 2016 at 1:55 PM

Palo Alto Networks Inc (NYSE:PANW) was scheduled to report its fiscal second-quarter earnings report after the bell on Thursday, but due to what the company's deeming a "manual error," the results were released slightly early. While this isn't a good look for a company that's primary objective is to keep information secure, Wall Street has responded positively to the results, as its earnings and revenue topped expectations. PANW finished yesterday's session up 9.7%.

PANW is continuing this uptrend today, adding another 2.6% at $143.98. Analysts have been weighing in, with FBR and RBC raising their price targets to $170 and $195, respectively -- though Imperial Capital lowered its price target to $190 from $205.

In the options pits, call players have to be happy about the stock's recent price action. Palo Alto Networks Inc's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.20, meaning call buying has been more popular than put buying recently. Meanwhile, the shares' bullish price action is spreading to other stocks in the cybersecurity sector.

Sector peer Cyberark Software Ltd (NASDAQ:CYBR) has gained 2.9% to trade at $37.94, as it tries to chip away at its year-over-year loss of 36%. FireEye Inc (NASDAQ:FEYE) is even better off, picking up 4.3% at $16.46, though the shares are currently testing their descending 50-day moving average.

Even BlackBerry Ltd (NASDAQ:BBRY), which recently entered the security space, is storming higher on the news. Shares of BBRY are up 4.5% at $7.59, but stalled out near their 50-day trendline, which has oscillated between support and resistance in recent months. It should be noted that -- like PANW -- CYBR, FEYE, and BBRY have all experienced heavy doses of call buying during the past 10 days at the ISE, CBOE, and PHLX. So cybersecurity bulls across the board are likely cheering this end-of-week surge.

Follow @Schaeffers

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released!