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Palo Alto Networks (PANW) Registers a Bigger Fall Than the Market: Important Facts to Note

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Palo Alto Networks (PANW - Free Report) ended the recent trading session at $351.87, demonstrating a -3.83% change from the preceding day's closing price. This move lagged the S&P 500's daily loss of 0.51%. On the other hand, the Dow registered a gain of 0.41%, and the technology-centric Nasdaq decreased by 1.07%.

Prior to today's trading, shares of the security software maker had lost 9.27% was narrower than the Computer and Technology sector's loss of 9.88% and lagged the S&P 500's loss of 0.87%.

The investment community will be paying close attention to the earnings performance of Palo Alto Networks in its upcoming release. The company is predicted to post an EPS of $0.97, indicating a 4.3% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $3.31 billion, indicating a 33.62% increase compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.18 per share and a revenue of $14.17 billion, indicating changes of +8.85% and +23.42%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Palo Alto Networks. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.35% higher. As of now, Palo Alto Networks holds a Zacks Rank of #3 (Hold).

In terms of valuation, Palo Alto Networks is currently trading at a Forward P/E ratio of 87.56. This valuation marks a premium compared to its industry average Forward P/E of 53.03.

We can also see that PANW currently has a PEG ratio of 5.82. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As of the close of trade yesterday, the Security industry held an average PEG ratio of 3.23.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 67, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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