By Senad Karaahmetovic

Premarket trading saw shares of Palo Alto Networks rise more than 11% after they issued an optimistic FQ4-adjusted EPS guidance.

PANW posted an adjusted earnings per share of $1.79 in its third quarter, up from $1.38 the prior year. Analyst consensus was $1.68. The revenue came in at $1.39 Billion, an increase of 29% YoY. This is above the $1.36 Billion estimate.

The company projects an adjusted EPS range between $2.26 and $2.29 for Q4, beating consensus estimates of $2.22 per shares. PANW anticipates that Q4 revenue will be between $1.53 and $1.55 Billion, as opposed to analyst estimates of 1.53 billion. Analysts were expecting billings to be between $2.32 and $2.35 trillion, while PANW expects $2.32 billion to $2.35 billion.

PANW anticipates an adjusted EPS range from $7.43- $7.46 for the full year, which is higher than the $7.23 to $7.30 forecast and surpasses the $7.29 share.

FY revenues are expected to be in the $5.48-$5.50 billion range, which is higher than the $5.43 billion to 5.48 billion forecast and lower than the $5.46 billion analyst estimates.

“On the back of this strength across our portfolio, we are again raising our guidance for the year across revenue, billings and earnings per share,” the company said.

BMO analyst Keith Bachman is still positive about PANW after the results. However, the analyst reduced the target price to $615.00 per Share from $685.00 in order to reflect the lower multiples.

“We think PANW can sustain high 20% FCF growth over the next few years. Furthermore, investors will still prefer stocks that have reasonable FCF multiples to growth stories that are low in margins/FCF. Hence, we comfortably reiterate our Outperform rating and top pick designation for PANW,” Bachman said in a client note.

Gregg Moskowitz from Mizuho reiterated his Buy rating for PANW as well as his Top Idea status.

“We remain very constructive on the improving mix shift toward higher-growth recurring revenue, and we reiterate our view that PANW easily possesses the strongest array of cloud assets among traditional network security vendors. PANW remains one of our top picks,” the analyst told clients.