leaders. better reviews than the barbie movie. >> i was going to say, who are the some? let's get them out of here. fresh the enthusiastic support. should be fun. there was plenty to kick around this week, so we'll do, that we'll break it all down later. >> tune in. meantime, markets finished the day mixed. "fast money" begins right now. thank you, morgan. right now on "fast", rarer than a shooting star on a snowstorm in august. earnings report after the bell on a friday night sending share of palo alto jumping after hours. we're digging in on the numbers and bringing you those details from the two-hour long conference call. plus, countdown to jack son hole, feds convening as interest rates hover at 16-year highs. and later, we've only just scratched the surface of retail earnings this quarter.

macy's nordstrom and kohl's are on the docket next week. on desk tonight we have steve grasso, bonawyn eison, tim seymour, and julie beal. we start with the rare friday night earnings alert on palo alto. the company reported better than expected earnings even as revenues came in slightly below guidance. that monster two-hour earnings call is under way. bertha kuhns joins us with the latest. >> it's still going on but said they were only going take questions for 15 minutes. we'll see if he extend. meantime, palo alto did beat on the bottom line reporting adjusted earnings of $1.44 a share. top line came shy of expectations at $1.9 billion.

still up 26% year over year. the company noting that operating margins increased more than 5 percentage points for the full year as it continued to focus on profitability. and we see that trend in its 2024 guidance once again. on the bottom line, better than expected. they are predicting $5.27 to $5.40 a sherrick well above consensus, but the revenue, again, shy of expectations at $8.15 billion the $8.2 billion. the street looking for $8.38 billion. on the conference call, the ceo talked about signing a large retailer in a contract for security, displacing a competitor. maybe this is what we saw with fortnet, which is what had everybody so nervous about the upcoming report. the company saying its new product is growing faster than expected and shaping up to be its fastest offering ever with

pressure on corporations to support breaches within four day of happening. the cfo noted that the rise in cost of money, higher interest rates, is causing customers to seek delayed payments, and those delayed payments were up 45% year over year. he said that it really is helping that they're able to offer a platform strategy, not just one product to get them to do a lot of things. looks like the call just ended right now. no, it didn't end. still on. they're on zoom, interestingly enough. nobody has their cameras up except for the executives. back over to you. >> thank you very much, appreciate it. lots going on. jame cramer will be speaking exclusively with palo alto

networks ceo nikekh arora. steve, you bought a little bit of palo alto earlier, but you're already done. >> bought it around 210 and in the last half hour to play. i actually cousining. i wanted to buy it earlier, but i felt it was just going to be a binary episode. knew there was a chance it could trade down ten and maybe up 20. definitely a little more upside. but i was listening to my good friend dan ives on scott's show and said, let me roll the dice. take a flier, buy some stock. didn't lie a lot. bought enough to make it worth my while for a 15-minute turnaround. bought at 210, sold at 228 1/2. it sold as high as 255 recently. sold down to 200. everyone was worried about the friday call. everyone was worried about their

competitors in the space having week earnings. so there's so much that was already taken out or discounted in the name that really they had the disappoint dramatically for it to be worth $50 in the sock. i knew there was a shot this was going to be like a beach bell held under water and you could get that pop after hours. eps came in. i had revenues in line. for me that was the makings of a pop above. and there are so many times you see everyone on the wrong side of the boat or the same side of the boat and i wanted to take profits in this. there's a good chance this thing fades down lower. not going to look a gift horse in the mouth, take my profits. >> steve went through the action. bertha gave us results. bonawyn, what do you make of the quarter? why did they do this on a friday night? >> first off, great trade, steve. very well executed.

in terms of why they decided, to i don't know why. i'm not even going to begin to guess. for me there was no positive set up to doing so. made any nervous, clearly made steve nervous, made a lot of investors nervous. but when you start to parse the numbers -- i'm going to drag in the last quarter as well. yes, the revenues were slightly light, but when you look at gross margins around 70%, and reported increased operating margins by about 5%. all that along with the free crash flow. last 12 months was $2.7 billion. all of that helps to offset the fact that they do have customers that are looking to defer payment. that's going to start to stretch out working capital. but the fact this they're so free cash flow positive allows them to do that. we talked a lot about the performance of the nasdaq recently coupled with rate volatility. what you want and what you're getting from this company is arr growth, and that allows you some visibility into earnings going forward when we're in a very

uncertain -- customers have born out very uncertain cost os capital, interest rate, and credit environment. all of that is a pretty positive setup. when i'm looking at names and looking at forward earnings and multiples, this is about 44 times, which anyone would agree is pretty expensive. but this particular pocket, given the arr deserves a premium multiple in a market where perhaps the nasdaq is starting to underperform. these are the type of names i think you can still pay for because they're showing continued growth and profitability. i think it's that coupling there that makes them a bit more impervious to criticism you're seeing across the board in other nasdaq names. >> julie, what's your take on the quarter and i guess particularly the revenue guidance coming in disappointing? but to bonawyn's point, profitability. >> i think that's right. i think expectations on a friday for sure, a lot of us were like,

uh-oh, that is not a good sign. but we're okay here, and i think what they're trying to do is give themselves breathing room in their revenue guidance, have really strong earnings to demonstrate this path to profitability that is actually happening. we've seen so many software businesses that are underearning relative to their proper earnings power, and this one is really starting to demonstrate, as most really good quality software businesses go, they tend to be very profitable. with palo alto, the security businesses, you don't rip them out. the cost of switching is really high. you may add other systems on top, but you're not taking this stuff out. there's durability to their earnings, and i think he have been able to demonstrate that, you know, customers want to buy their products. the product growth and the product margins were super strong, especially if you look at them year over year. i think that's like a pretty

compelling setup and something that has earnings resilience to it. >> very interesting. tim, what do you make about the durability of their earnings and ability for the stock to continue higher, even though most tech continues to be pressured in the macro environment? >> well, that fiscal billings number is the largest number they have had in i think ever, certainly over the last seven or eight quarters. and the highlight here is just that this is a very different company than fortnet. you have a lot of concern. there was a lot of concern coming into this number in terms of the virtual firewall and some of their core business. that's not really where palo alto is solely focused, and i would just say as we look across the strength a their business, and as you get into both the billings, the stickiness and what folks have talked about here, the highly free cash flow generative nature of the business, i don't think it's that business. certainly not expensive compared

to itself. if you put a 21 or 22 times free cash multiple on next year, this is a 250 or $260 stock. pulled back 20% into these numbers. as we talked about, the weakness was something that i think had many people concerned. if a strok falls on a friday evening in late august in the summer time and nobody's watching, it still falls. the opposite is clearly true right now. their business is really solid. the question is -- we've started to talk about this on "fast money" a couple weeks ago. dan brought up the data dog and some of the dynamics around some software companies. are we starting to see a breakdown of what the market was willing to pay? because the growth is still solid. that's really the question, because this week and last week was a question where, if we look at the market for broadly, high multiple tech was really hit,

and there's -- obviously the q kw qqs and semis as groups led the move lower but it was high multiple stuff in a rising rate market that people are approaching same way they did in november 2021, people assessing the high multiple tech world. that's what you're weighing with palo alto, because it's best of breed. >> let's get more on palo alto's results. joel, we're trading above it. tim thinks this could be worth 250 to 260 bucks. do you think you need to up your price target after this. >> >> unfortunately i can't say what i'm going between now and when the call is over, but i'd agree with you. i'm on the call right now, it's actually been broken into two calls. first call is the earnings report, and now they're talking about the mid to longer term

forecast, and i think that's going to be the more interesting part of the call. >> ah, i see. that makes a lot of sense. you have this at a buy rating. you and again, you can't say what you'll do if you make any changes, but from the result, what did you like? is there anything there you still have questions about you want to hear more about on the second call for medium to long-term planning? >> the street was expecting fireworks. we got sprinklers so far. i think that's been the consensus. frankly we were in the position we didn't think they could announce anything too bad or too major. i don't think the lawyers or regulators would let them sit on news like that. what we liked is the free cash flow. really good free cash flow. the second part of the call they're going to focus on -- the space is frag meanted, lots of ve vendors. pala alto is one of the go-to companies in the cybersecurity space. we think they're going to go

above the market and expand margins. that's the takeaway from the call so far, from our perspective, and i think they're in probably the pole position, best position from a cybersecurity perspective out of almost every company out there. >> joel, when you look at revenue by segment, palo alto seems to be the top, head and shoulders above the rest of the group. what is it about that revenue? where do you think they have the largest advantage over the competitive space that they actually conduct their business in? >> yeah, so the one big takeaway in this report -- and i think somebody alluded to it -- is their cloud security business. the world's moving to the clod. we all know that. they're in pole position. it's growing at 50%. that's what's differentiating them. they're taking customers already on premise that have legacy firewalls, et cetera, and moving them in their journey to the

cloud. that's what's differentiating them and that's what they're benefitting from and will benefit from going forward. we're in the position we're only 20% to 30% through that journey. they're going to be there for their customers taking them through that. what they've shown shown is not only -- and the biggest question we have too out of this call, and we'll be asking this of them, will they need to do more acquisitions to bolster their port ffolio to get them to the numbers they need to hit or can they do it with current infrastructure they have now? my guess is we're going to see palo alto become inquisitive in this environment and buy more companies. >> awesome stuff. thanks for joining usle we'll let you get back on the call. in the meantime, i'm going to turn to bonawyn. do you think they need acquisitions to continue hitting targets? >> that's one of the things i want to follow up with them on. i think it's the life blood of

their business. not to say there hasn't been organic growth, but yes, gun to my head, i think they're going to be pursuing other acqui acquisitions, particularly in an environment where they're pursuing so much cash. yes is the answer. coming up, rates take a break. the yield on the ten-year treasury finally pulled back. but how will the recent run factor into the feds decision next week in jackson hole? we'll break that down and what to expect next. later on in "options action," trader's intuition. and how the desk thinks you might want to play it. more "fast money" in two. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

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welcome back to "fast money." markets sputtering to close out a rough week. the dow closing marginally higher. both ended the day down again. friday's sluggish performance locking in losing weeks for the major indices. the dow seeing its worst week. the moves come ahead of another

very busy week for earnings and and the fed's annual economic policy symposium in jackson hole. chair powell set to speak next friday. what's the tradup? seems like the sentiment is decidely negative here. >> part of it is where we have been, and so the sentiment was so ebb ewe lent coming into the last few weeks and all of a sudden it's really turned on a dime. all the economists started to can ph late and say actually there probably won't be a recession. with rates where they are, there's questions what that means. it's a mixed picture. you can cherry pick. it's very mixed data. but i think where the fed is is they just really want to get this absolutely right, and in order to do that they want to fill their entire bingo card. in order to do that they're going to have to hold higher for a really long time, and i think that's going to be the direction

of chairman powell's commentary. >> tim, when we got the minutes this week, it was like you could make a case for the doves, for the hawks. i don't think they're going to show us cards this week on friday. so what could we expect from chair powell? or do you agree or disagree with that idea? >> i don't feel like there's much he can do to do beyond the expectations he's managed. data this week tells you there's both sides of the argument. the labor market hasn't done must have of anything since march. as much as we expect the labor markets will come under pressure, you can't tell me they have. if you look at the retail sales numbers, surprise to the upside, but no question a pull back in discretionary, and there was less spending outside of staples and commoditized groups. i think the fed can do little next weak, and you have to get into a market that going into

this move, it was a 20% move for the s&p out of that avb bottom. it was a dynamic we ushered in four or five other ingredients that have put life -- moved higher in the bond market into yields, whether it's china, treasury refunding. rates are higher. equities are being looked ate differently. it's the last five of seven trading days, the market's after a rally in the morning sold off into a close. i just think between the money market flows that are going into that part of the market out of equities there's a lot of move in etfs. these are just some of the data points i'm seeing. i think equities can trade lower here. doesn't mean the fed has to change course. i don't think they're going to say anything that will change the narrative so far. >> any advice for traders? jackson hole's not till friday. what till then?

>> now we're having negativity where those seven or so stocks that led the way are getting hit the hardest. i think the market will probably level off in the next couple of days. the fed has the disposal of 400 different economists that work at the federal reserve, and they can't tell you when the next recession was, when we have had one until we're over one. i'm staying long. >> i too would like to predict things after they happen. coming up, more than just jackson hole on the calendar next week. we're digging into what's next for retail. you're watching "fast money" live from the nasdaqar mket site in times square. we're back right after this. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy?

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welcome back to "fast

money." from sporting goods to department stores, a range of retailer delivering next week. could this be a make or break week for the group? so far this week, mixed messaging. inventory levels down, margins are up. weak sales in a lot of area of discretionary, and we have a ton of players in that sector next week. >> discretionary is an area i'll be focusing on because there's been so much inflationary pressure in the core goods segment that you don't have to additional income to go after those. in terms of names, dollar tree is one i'll be focused on. i think there is a thesis there is a k shaped recovery strength from the consumer. you have your cohort of wealthier consumer that seem to be doing well, and the less wealthy that are under pressure, and i think dollar tree will shed light on there. nvidia will be under focus. some of the sufferings of the

nasdaq, and i think that name will shed light there. >> very interesting. obviously one of the magnificent seven. julie, what about you? deeper read on the consumer? signals from the fed? what are you watching? >> nordstrom. this is a business that rack, its off price business has been struggling so hard. after the really goodresults out of ross and t.j. i'm curious to see if that business has sorted itself out, and also how they're talking about their higher end consumer, if that is going to be as strong as people are hoping. i think that's kind of an important to figure that out. >> absolutely. tapestry mentioned softness in the consumer which is at play. all right, well, i think it's almost time for the final trade. okay, here it is. julie -- tim you get to start. >> okay. thanks for joining us, courtney. i'll just stay here, and i'll say seller of lulu.

i'm short nike. pull forward. 15 month highs. they have not pulled back. sell lulu. >> sell lulu. julie? >> aspen is a chemical software company. i think people are worry about arr, and it's looking look. nice way to play commodities. >> steve grasso? >> grayscale trust. every time it sells off i buy more and more. >> bonawyn? >> you're seeing weakness in a home builders space. i think you'll get an opportunity to get back in a little bit lower. >> all right, don't awhe.gonyer "options action" is coming up next. 't qualify for the erc tax refund, so i called innovation refunds. their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your small business qualifies.

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right now on o.a., though the markets logged a week of losses, the retail sector is feeling better by comparison, and another telling set of quarterly results is on deck for next week and we're making a laundry list of picks. not much better news in tech. focusing on the magnificent seven. have two