What happened

Shares of Palo Alto Networks (NYSE:PANW) trailed the market last month, falling 10% compared to a 2% decline in the S&P 500, according to S&P Global Market Intelligence. The drop pushed shares below the returns of the broader market so far in 2019, but the cybersecurity stock is still up by about 10% this year.

So what

Palo Alto Networks didn't make any major business announcements in August. Instead, investors pushed shares lower on expectations of a protracted trade war between the U.S. and China. The company sells hardware and software designed to protect networks from cyberattacks, and many of its hardware components fell under recent tariff rate increases.

A bank of computer servers.

Image source: Getty Images.

Now what

In its just-announced fiscal fourth-quarter report, Palo Alto Networks shrugged off these tariff fears. Growth was strong over the past few months, with sales rising 22% and billings crossing the $1 billion mark for the first time. The company paired this good news with an aggressive outlook that sees billings rising at a compound annual growth rate of 20% through 2022.

Executives are predicting heavy spending, including on more acquisitions like its recent Zingbox purchase. These moves are helping expand Palo Alto Networks' addressable market, while pressuring earnings in the short term.