Palo Alto Networks (PANW) Gains As Market Dips: What You Should Know

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Palo Alto Networks (PANW) closed at $492.86 in the latest trading session, marking a +1.3% move from the prior day. This move outpaced the S&P 500’s daily loss of 0.51%.

Heading into today, shares of the security software maker had gained 2.14% over the past month, outpacing the Computer and Technology sector’s loss of 1.72% and lagging the S&P 500’s gain of 3.08% in that time.

PANW will be looking to display strength as it nears its next earnings release. On that day, PANW is projected to report earnings of $1.57 per share, which would represent a year-over-year decline of 3.09%. Our most recent consensus estimate is calling for quarterly revenue of $1.2 billion, up 27.2% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.24 per share and revenue of $5.31 billion, which would represent changes of +17.92% and +24.76%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for PANW. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PANW currently has a Zacks Rank of #2 (Buy).

Investors should also note PANW’s current valuation metrics, including its Forward P/E ratio of 67.23. For comparison, its industry has an average Forward P/E of 44.92, which means PANW is trading at a premium to the group.

Meanwhile, PANW’s PEG ratio is currently 2.62. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Security was holding an average PEG ratio of 2.63 at yesterday’s closing price.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 87, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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