A weaker than expected result and tepid forecast saw US tech giant Palo Alto Networks' NYSE-listed shares dive 17.01 per cent today, outpacing a 3.15 per cent fall in the broader market that was pegged on coronavirus fears.

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CBS MarketWatch called it the company's worst single-day slide in three years.

Sir John Key joined the security company's board in April last year, and has his work cut out as it faces controversy over executive compensation and results that have fallen short of investor and analyst expectations.

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The Wall Street Journal flagged Palo Alto Networks on its "Stocks to Watch" list early today, noting "the network-security company cut financial targets for the year following disappointing second-quarter results" after the market closed yesterday.

Chief executive Nikesh Arora said on a conference call, "We were expecting improvement this quarter, which hasn't arrived. Product performance did improve partly because the sales incentive change is going to take longer than expected. And partly, because we were too optimistic about some of the deals closing in the quarter."

Deutsche Bank analyst Karl Keirstead, who downgraded Palo Alto Networks from hold to buy, wasn't dubious about Arora's explanation.

"It seems highly unlikely to us that the firewall revenue deceleration is all about internal sales incentives.

"A slowdown of this magnitude now feels more like a network firewall hardware problem that is likely to persist throughout 2020."

Raymond James analyst Michael Turits, who also cut his rating, had concerns that Palo Alto Networks had fallen behind rival Fortinet, in part because it was late the market with a key product.

Palo Alto Network yesterday reported second-quarter revenue of US$816.7 million ($1.2 billion), up 15 per cent from a year ago, with a net loss of US$73.7m or 75 cents a share. Non-GAAP second-quarter earnings (which exclude acquisition-related costs and share-based compensation charges) were US$1.19 a share.

Wall Street had been looking for second-quarter revenue of US$843.3m with non-GAAP earnings of US$1.12 a share.

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Third-quarter revenue was forecast at $835m to $850m with non-GAAP earnings of 96 cents a share to 98 cents a share - lower than the analyst consensus of revenue of US$873.08m with non-GAAP earnings of $1.25 a share.

After a two disappointing quarters, shares are well off their 52-week high of US$2.50.63 and close to their 52-week low of US$192.17.

Even with its recent share-swoon, the loss-making company, which projects full-year between US$3.35b and US$3.39b, has a market cap of US$19.3b.