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

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In the latest trading session, Palo Alto Networks (PANW - Free Report) closed at $257.88, marking a +1.27% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.2%. At the same time, the Dow lost 0.38%, and the tech-heavy Nasdaq lost 9.78%.

Heading into today, shares of the security software maker had gained 13.31% over the past month, outpacing the Computer and Technology sector's gain of 4.63% and the S&P 500's gain of 4.16% in that time.

Investors will be hoping for strength from Palo Alto Networks as it approaches its next earnings release. In that report, analysts expect Palo Alto Networks to post earnings of $1.28 per share. This would mark year-over-year growth of 60%. Our most recent consensus estimate is calling for quarterly revenue of $1.96 billion, up 26.32% from the year-ago period.

PANW's full-year Zacks Consensus Estimates are calling for earnings of $4.27 per share and revenue of $6.9 billion. These results would represent year-over-year changes of +69.44% and +25.38%, respectively.

Any recent changes to analyst estimates for Palo Alto Networks should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.76% higher. Palo Alto Networks currently has a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that Palo Alto Networks has a Forward P/E ratio of 59.65 right now. This valuation marks a premium compared to its industry's average Forward P/E of 41.6.

It is also worth noting that PANW currently has a PEG ratio of 1.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 1.72 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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