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7 Reasons to Add Palo Alto (PANW) Stock to Your Portfolio
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Palo Alto Networks (PANW - Free Report) is currently one of the top-performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals.
Therefore, investors should consider adding the stock to their portfolio to shrug off the prevailing highly volatile market environment and make some gains from its upside potential.
Here’s Why PANW is an Attractive Pick
Share-Price Appreciation: Palo Alto’s price trend reflects that the stock has had an impressive run on the bourse over the past one year. Shares of the company have gained 43.9% compared with the Zacks Internet – Software industry’s and the S&P 500’s growth of 19.3% and 13.9%, respectively, over the trailing 12-month period.
Trading Way Below 52-Week High: PANW stock currently trades lower than its 52-week high, which reflects its potential to go upward. The stock’s closing price of $247.47 on Jul 10 is 4.4% lower than the 52-week high of $258.88 attained on Jul 5, 2023.
Solid Rank & Growth Score: Palo Alto currently flaunts a Zacks Rank #1 (Strong Buy) and a Growth Score of B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: Analysts have raised the estimates for fiscal 2023 and 2024 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2023 and 2024 moved north by 2 cents and 3 cents, respectively.
Positive Earnings Surprise History: PANW has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average surprise being 20.3%.
Strong Earnings Growth Potential: The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at $4.27 per share, suggesting year-over-year growth of approximately 69.4%. The consensus mark for fiscal 2024 earnings is pegged at $4.99 per share, indicating a year-over-year increase of 16.9%. Moreover, the long-term expected earnings growth rate for the stock is pegged at 31.5%.
Robust Fundamental Growth Drivers: Palo Alto is benefiting from the increased adoption of its next-generation security platforms, driven by a rise in the remote working policy among top-notch companies. The cyber security firm continues to win back-to-back deals for offering unique cyber safety solutions, which ensure the blocking of attacks or malicious content. It is currently focusing on selling more subscription-based services which, in turn, is helping it to generate stable revenues while expanding margins.
Palo Alto's subscription-based services like AutoFocus, Aperture, Traps, WildFire and Virtual are witnessing solid growth and bolstering the customer base. We believe that continued focus on subscription-based products and services will boost the company’s top line.
In May 2023, the cybersecurity firm announced that it is bringing its industry-leading machine learning-powered next-generation firewall to Microsoft Azure as a fully managed Azure-native independent software vendor service. In April, Palo Alto expanded its Unit 42 Digital Forensics and Incident Response Service.
In March, the company announced new capabilities to boost its single-vendor secure access service edge solution enabling organizations to automate their increasingly complex information technology and network operations center functions. Additionally, the company announced features to secure internet of things and automate branch management.
Growing traction in Palo Alto's Prisma and Cortex offerings continues to act as a tailwind. The company made strategic acquisitions to accelerate growth through the expansion of its product portfolio and global footprint. In 2022, it acquired Cider Security, a pioneer in application security and software supply chain security.
PANW’s Bridgecrew buyout in 2021 enabled Prisma Cloud to become the first cloud security platform to deliver security across the full application lifecycle. Palo Alto’s The Crypsis Group buyout in 2020 strengthened its Cortex platform with expert services for incident response and proactive assurance. Such acquisitions are likely to boost the company’s revenue growth opportunities.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 22.1% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised northward from $1.04 to $2.04 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 178.4% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised upward by a penny to $2.83 per share over the past seven days. For 2023, earnings estimates have moved north by 3 cents to $11.97 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 80.4% in the past year.
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7 Reasons to Add Palo Alto (PANW) Stock to Your Portfolio
Palo Alto Networks (PANW - Free Report) is currently one of the top-performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals.
Therefore, investors should consider adding the stock to their portfolio to shrug off the prevailing highly volatile market environment and make some gains from its upside potential.
Here’s Why PANW is an Attractive Pick
Share-Price Appreciation: Palo Alto’s price trend reflects that the stock has had an impressive run on the bourse over the past one year. Shares of the company have gained 43.9% compared with the Zacks Internet – Software industry’s and the S&P 500’s growth of 19.3% and 13.9%, respectively, over the trailing 12-month period.
Palo Alto Networks, Inc. Price and Consensus
Palo Alto Networks, Inc. price-consensus-chart | Palo Alto Networks, Inc. Quote
Trading Way Below 52-Week High: PANW stock currently trades lower than its 52-week high, which reflects its potential to go upward. The stock’s closing price of $247.47 on Jul 10 is 4.4% lower than the 52-week high of $258.88 attained on Jul 5, 2023.
Solid Rank & Growth Score: Palo Alto currently flaunts a Zacks Rank #1 (Strong Buy) and a Growth Score of B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: Analysts have raised the estimates for fiscal 2023 and 2024 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2023 and 2024 moved north by 2 cents and 3 cents, respectively.
Positive Earnings Surprise History: PANW has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average surprise being 20.3%.
Strong Earnings Growth Potential: The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at $4.27 per share, suggesting year-over-year growth of approximately 69.4%. The consensus mark for fiscal 2024 earnings is pegged at $4.99 per share, indicating a year-over-year increase of 16.9%. Moreover, the long-term expected earnings growth rate for the stock is pegged at 31.5%.
Robust Fundamental Growth Drivers: Palo Alto is benefiting from the increased adoption of its next-generation security platforms, driven by a rise in the remote working policy among top-notch companies. The cyber security firm continues to win back-to-back deals for offering unique cyber safety solutions, which ensure the blocking of attacks or malicious content. It is currently focusing on selling more subscription-based services which, in turn, is helping it to generate stable revenues while expanding margins.
Palo Alto's subscription-based services like AutoFocus, Aperture, Traps, WildFire and Virtual are witnessing solid growth and bolstering the customer base. We believe that continued focus on subscription-based products and services will boost the company’s top line.
In May 2023, the cybersecurity firm announced that it is bringing its industry-leading machine learning-powered next-generation firewall to Microsoft Azure as a fully managed Azure-native independent software vendor service. In April, Palo Alto expanded its Unit 42 Digital Forensics and Incident Response Service.
In March, the company announced new capabilities to boost its single-vendor secure access service edge solution enabling organizations to automate their increasingly complex information technology and network operations center functions. Additionally, the company announced features to secure internet of things and automate branch management.
Growing traction in Palo Alto's Prisma and Cortex offerings continues to act as a tailwind. The company made strategic acquisitions to accelerate growth through the expansion of its product portfolio and global footprint. In 2022, it acquired Cider Security, a pioneer in application security and software supply chain security.
PANW’s Bridgecrew buyout in 2021 enabled Prisma Cloud to become the first cloud security platform to deliver security across the full application lifecycle. Palo Alto’s The Crypsis Group buyout in 2020 strengthened its Cortex platform with expert services for incident response and proactive assurance. Such acquisitions are likely to boost the company’s revenue growth opportunities.
Other Stocks to Consider
Some other top-ranked stocks from the broader Computer and Technology sector are Salesforce (CRM - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Meta Platforms (META - Free Report) . While Salesforce and NVIDIA sport a Zacks Rank #1, Meta carries a Zacks Rank #2 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 22.1% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised northward from $1.04 to $2.04 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 178.4% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised upward by a penny to $2.83 per share over the past seven days. For 2023, earnings estimates have moved north by 3 cents to $11.97 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 80.4% in the past year.