Palo Alto Networks (PANW -23%) shares have plummeted today after the company missed sales estimates for the second quarter in a row.
The cyber security company also offered guidance below consensus for the third straight quarter and cut its outlook for the full year.
Palo Alto blamed its sales strategy, which impacted productivity and pipeline conversion. The company is in the process of reshuffling its sales team and hopes to exit this fiscal year (ending July) with a better sales strategy. Management blamed an elongated sales cycle last quarter and said that issue arose once again in January.
It appears that networking giant Cisco (CSCO) also may be taking market share from Palo Alto.
Importantly, the company does not see a broader slowdown in spending habits for security, so peers are holding up better than they did last quarter when PANW disappointed.
Palo Alto also postponed the Investor Day that which was scheduled for March 27.
At least eight analysts downgraded the stock today. It is evident that high multiple growth stocks don't have much room for error.
PANW has a market cap of ~$11 billion and still trades at ~6.4x fiscal 2017 sales.