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

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Palo Alto Networks (PANW - Free Report) closed the most recent trading day at $169.60, moving -1.61% from the previous trading session. This change lagged the S&P 500's daily gain of 0.22%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq lost 0.15%.

Coming into today, shares of the security software maker had lost 14.9% in the past month. In that same time, the Computer and Technology sector lost 2.32%, while the S&P 500 lost 0.57%.

PANW will be looking to display strength as it nears its next earnings release, which is expected to be November 29, 2018. The company is expected to report EPS of $1.05, up 41.89% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $631.70 million, up 24.97% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.03 per share and revenue of $2.78 billion, which would represent changes of +26.07% and +22.14%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for PANW. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. PANW currently has a Zacks Rank of #3 (Hold).

Investors should also note PANW's current valuation metrics, including its Forward P/E ratio of 34.28. For comparison, its industry has an average Forward P/E of 47.65, which means PANW is trading at a discount to the group.

Investors should also note that PANW has a PEG ratio of 1.46 right now. 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. The Security industry currently had an average PEG ratio of 2.57 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 25, which puts it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow PANW in the coming trading sessions, be sure to utilize Zacks.com.


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