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What You Missed Out by Overlooking Palo Alto (PANW) Stock
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Since the beginning of 2018, shares of Palo Alto Networks, Inc. (PANW - Free Report) have been on an upswing, appreciating 48.7% in the year so far. The stock crafted a 52-week high of $217.40 during yesterday’s trading session. Over the past year, it has rallied 63.8%, significantly outperforming its industry’s gain of 32.3%.
A successful portfolio manager understands the importance of adding well-performing stocks at the right time. Indicators of a stock’s bullish run include a rise in its share price and strong fundamentals.
And we believe Palo Alto Networks is one such stock that investors need to hold on to right now. Though there are a few short-lived concerns regarding the stock, it has the potential to perform well over the long haul.
What’s Behind the Momentum?
The stock has a fantastic record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 9.3%. In its recent earnings results, Palo Alto Networks reported revenues and non-GAAP earnings per share (EPS) of $567.1 million and 99 cents, respectively. Both quarterly revenues and earnings outpaced the respective Zacks Consensus Estimate, and marked significant year-over-year improvement as well.
Palo Alto Networks is growing rapidly in the cybersecurity space on the back of its innovative next-generation security platforms. Over the past two years, the company launched several subscription-based products, including WildFire, AutoFocus, Aperture, Traps and Virtual, which have been witnessing strong adoption among organizations.
The company’s innovative product portfolio and continued efforts to enhance the same with advanced features helps Palo Alto clinche new deals. Notably, during third-quarter fiscal 2018, the company added nearly 3,000 customers, bringing the total to more than 51,000 worldwide. It should be noted that in each of the last 25 quarters, Palo Alto has added at least 1,000 customers.
Furthermore, acquisitions have been one of the key strategies of Palo Alto to enhance its product portfolio, as well as expand the company’s global reach. Last year, it acquired LightCyber for $105 million, which expanded its Next-Generation Security Platform. Over the past few years, the company has completed three important buyouts — Morta Security, Cyvera and CirroSecure.
Additionally, the company is keen on expanding its cloud exposure through partnerships. It has other existing cloud partnerships with companies like Amazon’s (AMZN - Free Report) Amazon Web Services and Alphabet’s (GOOGL - Free Report) Google Cloud. In August 2017, the company extended its ties with VMware, Inc. .
Impressive Valuations
The stock currently trades at a forward earnings estimate at 55.5x, which is way lower than its industry’s average of 86.2x. Given the recent track record of revenues and earnings growth, as well as the long-term forecast, the stock is highly undervalued which indicates that it still has significant upside potential.
Moreover, Fortinet has a VGM Style Score of B. We note that our VGM score highlights the determining elements in a stock that can push the stock price higher. We can essentially filter out the negatives and focus on the positives which drive its price.
Consequently, we believe the stock still has potential to surge higher and therefore, investors should consider it for near-term opportunities.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
What You Missed Out by Overlooking Palo Alto (PANW) Stock
Since the beginning of 2018, shares of Palo Alto Networks, Inc. (PANW - Free Report) have been on an upswing, appreciating 48.7% in the year so far. The stock crafted a 52-week high of $217.40 during yesterday’s trading session. Over the past year, it has rallied 63.8%, significantly outperforming its industry’s gain of 32.3%.
A successful portfolio manager understands the importance of adding well-performing stocks at the right time. Indicators of a stock’s bullish run include a rise in its share price and strong fundamentals.
And we believe Palo Alto Networks is one such stock that investors need to hold on to right now. Though there are a few short-lived concerns regarding the stock, it has the potential to perform well over the long haul.
What’s Behind the Momentum?
The stock has a fantastic record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 9.3%. In its recent earnings results, Palo Alto Networks reported revenues and non-GAAP earnings per share (EPS) of $567.1 million and 99 cents, respectively. Both quarterly revenues and earnings outpaced the respective Zacks Consensus Estimate, and marked significant year-over-year improvement as well.
Palo Alto Networks is growing rapidly in the cybersecurity space on the back of its innovative next-generation security platforms. Over the past two years, the company launched several subscription-based products, including WildFire, AutoFocus, Aperture, Traps and Virtual, which have been witnessing strong adoption among organizations.
The company’s innovative product portfolio and continued efforts to enhance the same with advanced features helps Palo Alto clinche new deals. Notably, during third-quarter fiscal 2018, the company added nearly 3,000 customers, bringing the total to more than 51,000 worldwide. It should be noted that in each of the last 25 quarters, Palo Alto has added at least 1,000 customers.
Furthermore, acquisitions have been one of the key strategies of Palo Alto to enhance its product portfolio, as well as expand the company’s global reach. Last year, it acquired LightCyber for $105 million, which expanded its Next-Generation Security Platform. Over the past few years, the company has completed three important buyouts — Morta Security, Cyvera and CirroSecure.
Additionally, the company is keen on expanding its cloud exposure through partnerships. It has other existing cloud partnerships with companies like Amazon’s (AMZN - Free Report) Amazon Web Services and Alphabet’s (GOOGL - Free Report) Google Cloud. In August 2017, the company extended its ties with VMware, Inc. .
Impressive Valuations
The stock currently trades at a forward earnings estimate at 55.5x, which is way lower than its industry’s average of 86.2x. Given the recent track record of revenues and earnings growth, as well as the long-term forecast, the stock is highly undervalued which indicates that it still has significant upside potential.
Moreover, Fortinet has a VGM Style Score of B. We note that our VGM score highlights the determining elements in a stock that can push the stock price higher. We can essentially filter out the negatives and focus on the positives which drive its price.
Consequently, we believe the stock still has potential to surge higher and therefore, investors should consider it for near-term opportunities.
Palo Alto Networks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>