11:48 AM EDT, 08/16/2024 (MT Newswires) -- Palo Alto Networks' ( PANW ) guidance for fiscal 2025 will be a key focus when the company reports fourth-quarter results on Monday as the cybersecurity firm executes its "platformization" strategy, Wedbush Securities said in a note on Friday.

Platformization presents an opportunity to simplify security by reviewing all cybersecurity tools and looking for ways to consolidate, Paul Kaspian, principal product marketing manager of Palo Alto's Zero Trust offering, said in an April blog. As individual tools are consolidated, security teams will benefit from simplified management, reduced training overhead, and more effective security, Kaspian said at the time.

Only 900 of Palo Alto's top 5,000 customers have fully transitioned to the company's platform approach, but it is expected to gain pace, the brokerage said.

"We believe that the key focus of the quarter will be (fiscal 2025) guidance to determine the success of its platform approach with programs rolling out across geographies," analysts led by Daniel Ives wrote in the note.

The brokerage said its recent checks showed "slight headwinds" for Palo Alto's sales cycles due to the CrowdStrike ( CRWD ) outage that impacted near-term billings. However, the outage could be a tailwind for the company into fiscal 2025, according to the Wedbush analysts.

For the fiscal fourth quarter, Wall Street's expectations for $2.16 billion in Palo Alto revenue and $3.45 billion in billings are "hittable to slightly beatable," Wedbush said. The firm projects the company to report $2.19 billion in revenue for the quarter.

"While not expecting major fireworks on Monday after the bell with (fourth-quarter) earnings, we view the seeds of growth are being planted for a very important (fiscal 2025) ahead," Ives said.

The Street is expecting Palo Alto's fiscal 2025 revenue at about $9.11 billion, which would represent 14% annual growth, said Wedbush. Wedbush maintained its $375 price target and the outperform rating on Palo Alto.

The company "remains one of our favorite cyber names over the next 12-18 months despite seeing near-term headwinds with the platformization strategy as the company generates a more stable pipeline of long-term deals with the cloud penetration story acting as a major tailwind going forward," Ives said.

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