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Palo Alto (PANW) Rises 63.8% YTD: Will the Momentum Continue?
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Palo Alto Networks’ (PANW - Free Report) shares have made a remarkable run this year so far. The stock has rallied 61.6% year to date (YTD) and outperformed the broader equity indexes.
The Nasdaq Composite, The Dow Jones Industrial Average and the S&P 500 have increased 26.2%, 2.5% and 12.5%, respectively. It has also surpassed the gains of Technology Select Sector SPDR, the most important component of the broad market index, which has increased approximately 33% YTD.
Here’s Why PANW Stock is Rallying
We believe that PANW’s impressive growth profile is attracting investors. The company 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. PANW's Next-Generation Security Portfolio, a suite of advanced security solutions, saw a remarkable 56% increase in its annual recurring revenues in the fourth quarter of 2023.
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, are helping it to generate stable revenues while expanding margins.
Palo Alto's subscription-based services like AutoFocus, Aperture, Traps, WildFire and Virtual are not only witnessing solid growth but also bolstering the customer base. We believe that the subscription-based business model will continue to improve the company’s top and bottom lines.
Growing traction in PANW'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. Its 2021 Bridgecrew buyout enabled Prisma Cloud to become the first cloud security platform to deliver security across the full application lifecycle. The Cider Security acquisition in December 2022 further fortified Prisma Cloud’s capabilities.
Likewise, the company'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 PANW’s revenue growth opportunities.
Why Should You Bet in Palo Alto Stocks?
Amid the ongoing macroeconomic headwinds and geopolitical issues, it is prudent to pick solid growth companies as these are financially stable, accruing profits in established markets. These stocks, with their solid fundamentals, allow investors to hedge their funds from any economic downturn.
Considering Palo Alto’s impressive growth profile, we believe that it is the right time to invest in the stock. Apart from having solid fundamentals, the stock has the favorable combination of a Growth Score of B and a Zacks Rank #2 (Buy) at present.
Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or #2 and a Growth Score of A or B offer solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
PANW has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average surprise being 22.19%.
The Zacks Consensus Estimate of $5.34 per share for fiscal 2024 earnings suggests year-over-year growth of approximately 20.3%. The consensus mark for fiscal 2025 earnings is pegged at $6.39 per share, indicating a year-over-year surge of 19.8%. Moreover, the long-term expected earnings growth rate for the stock is pegged at 27.8%, which is better than the industry’s 24.7%.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology sector are Splunk , Dell Technologies (DELL - Free Report) and NVIDIA (NVDA - Free Report) , each sporting a Zacks Rank #1 at present.
The Zacks Consensus Estimate for Splunk's third-quarter fiscal 2024 earnings has been revised upward by 12 cents to $1.11 per share for the past 30 days. For fiscal 2024, earnings estimates have moved upward by a penny to $3.77 per share in the past seven days.
Splunk's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 154.90%. Shares of SPLK have soared 68.5% YTD.
The Zacks Consensus Estimate for Dell's third-quarter fiscal 2024 earnings has been revised 11 cents northward to $1.47 per share in the past 30 days. For 2024, earnings estimates have increased by 34 cents to $6.30 per share in the past seven days.
DELL’s earnings beat the Zacks Consensus Estimate four times in the preceding quarters, the average surprise being 39.52%. Shares of Dell have surged 78.3% YTD.
The Zacks Consensus Estimate for NVIDIA’s third-quarter fiscal 2023 earnings has been revised by 42 cents northward to $3.32 per share in the past 30 days. For fiscal 2023, earnings estimates have increased to $10.67 per share from $9.53 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in the preceding three quarters, while missing the same on one occasion. The average surprise is 9.79%. Shares of NVDA have rallied 184.8% YTD.
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Palo Alto (PANW) Rises 63.8% YTD: Will the Momentum Continue?
Palo Alto Networks’ (PANW - Free Report) shares have made a remarkable run this year so far. The stock has rallied 61.6% year to date (YTD) and outperformed the broader equity indexes.
The Nasdaq Composite, The Dow Jones Industrial Average and the S&P 500 have increased 26.2%, 2.5% and 12.5%, respectively. It has also surpassed the gains of Technology Select Sector SPDR, the most important component of the broad market index, which has increased approximately 33% YTD.
Here’s Why PANW Stock is Rallying
We believe that PANW’s impressive growth profile is attracting investors. The company 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. PANW's Next-Generation Security Portfolio, a suite of advanced security solutions, saw a remarkable 56% increase in its annual recurring revenues in the fourth quarter of 2023.
Palo Alto Networks, Inc. Price
Palo Alto Networks, Inc. price | Palo Alto Networks, Inc. Quote
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, are helping it to generate stable revenues while expanding margins.
Palo Alto's subscription-based services like AutoFocus, Aperture, Traps, WildFire and Virtual are not only witnessing solid growth but also bolstering the customer base. We believe that the subscription-based business model will continue to improve the company’s top and bottom lines.
Growing traction in PANW'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. Its 2021 Bridgecrew buyout enabled Prisma Cloud to become the first cloud security platform to deliver security across the full application lifecycle. The Cider Security acquisition in December 2022 further fortified Prisma Cloud’s capabilities.
Likewise, the company'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 PANW’s revenue growth opportunities.
Why Should You Bet in Palo Alto Stocks?
Amid the ongoing macroeconomic headwinds and geopolitical issues, it is prudent to pick solid growth companies as these are financially stable, accruing profits in established markets. These stocks, with their solid fundamentals, allow investors to hedge their funds from any economic downturn.
Considering Palo Alto’s impressive growth profile, we believe that it is the right time to invest in the stock. Apart from having solid fundamentals, the stock has the favorable combination of a Growth Score of B and a Zacks Rank #2 (Buy) at present.
Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or #2 and a Growth Score of A or B offer solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
PANW has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average surprise being 22.19%.
The Zacks Consensus Estimate of $5.34 per share for fiscal 2024 earnings suggests year-over-year growth of approximately 20.3%. The consensus mark for fiscal 2025 earnings is pegged at $6.39 per share, indicating a year-over-year surge of 19.8%. Moreover, the long-term expected earnings growth rate for the stock is pegged at 27.8%, which is better than the industry’s 24.7%.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology sector are Splunk , Dell Technologies (DELL - Free Report) and NVIDIA (NVDA - Free Report) , each sporting a Zacks Rank #1 at present.
The Zacks Consensus Estimate for Splunk's third-quarter fiscal 2024 earnings has been revised upward by 12 cents to $1.11 per share for the past 30 days. For fiscal 2024, earnings estimates have moved upward by a penny to $3.77 per share in the past seven days.
Splunk's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 154.90%. Shares of SPLK have soared 68.5% YTD.
The Zacks Consensus Estimate for Dell's third-quarter fiscal 2024 earnings has been revised 11 cents northward to $1.47 per share in the past 30 days. For 2024, earnings estimates have increased by 34 cents to $6.30 per share in the past seven days.
DELL’s earnings beat the Zacks Consensus Estimate four times in the preceding quarters, the average surprise being 39.52%. Shares of Dell have surged 78.3% YTD.
The Zacks Consensus Estimate for NVIDIA’s third-quarter fiscal 2023 earnings has been revised by 42 cents northward to $3.32 per share in the past 30 days. For fiscal 2023, earnings estimates have increased to $10.67 per share from $9.53 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in the preceding three quarters, while missing the same on one occasion. The average surprise is 9.79%. Shares of NVDA have rallied 184.8% YTD.