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Bull of the Day: Palo Alto Networks (PANW)

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Palo Alto Networks (PANW - Free Report) has seen its near-term earnings outlook turn bright, with positive earnings estimate revisions pushing the stock into the highly-coveted Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

Palo Alto Networks is a worldwide leader in cybersecurity, providing next-generation cybersecurity solutions to thousands of customers globally across all sectors. The company’s cutting-edge cybersecurity solutions are supported by industry-leading threat intelligence and state-of-the-art automation.

Let’s take a closer look at a few favorable characteristics of the cybersecurity titan.

Quarterly Performance

Palo Alto sports a stellar track record, exceeding the Zacks Consensus EPS Estimate in 24 consecutive quarters and fully reflecting the company’s ability to deliver robust results consistently.

Palo Alto posted impressive results in its latest release, reporting EPS of $1.05 and exceeding our $0.78 estimate by more than 30%. Further, the company generated roughly $1.6 billion in revenue throughout the quarter, ahead of expectations and growing by a sizable 26% year-over-year.

Zacks Investment Research

Image Source: Zacks Investment Research

As shown by the green arrow in the chart below, buyers came out to play following the company’s latest release.

Zacks Investment Research
Image Source: Zacks Investment Research

Keep an eye out for PANW’s next quarterly release on May 18th; the Zacks Consensus EPS Estimate of $0.92 implies growth of 55% from the year-ago quarter. In addition, our consensus revenue estimate presently sits at $1.7 billion, suggesting a climb of more than 23% year-over-year.

Valuation

Value investors may not find PANW shares attractive, with the company carrying a Style Score of “F” for Value. Presently, PANW’s 8.5X forward price-to-sales ratio resides on the expensive side, above the Zacks Computer and Technology sector average and the 7.5X five-year median.

Zacks Investment Research

Image Source: Zacks Investment Research

However, top and bottom line growth projections remain robust, making the premium investors will pay for shares less spooky.

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Palo Alto Networks (PANW - Free Report) would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).


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