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

Zacks Equity Research
·3-min read

In the latest trading session, Palo Alto Networks (PANW) closed at $508, marking a -0.77% move from the previous day. This change lagged the S&P 500's daily gain of 0.3%.

Heading into today, shares of the security software maker had gained 7.55% over the past month, outpacing the Computer and Technology sector's gain of 1.79% and the S&P 500's gain of 4.28% in that time.

Investors will be hoping for strength from PANW as it approaches its next earnings release. On that day, PANW is projected to report earnings of $1.57 per share, which would represent a year-over-year decline of 3.09%. Our most recent consensus estimate is calling for quarterly revenue of $1.2 billion, up 27.2% from the year-ago period.

PANW's full-year Zacks Consensus Estimates are calling for earnings of $7.24 per share and revenue of $5.31 billion. These results would represent year-over-year changes of +17.92% and +24.76%, respectively.

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Investors should also note any recent changes to analyst estimates for PANW. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant. PANW currently has a Zacks Rank of #2 (Buy).

Investors should also note PANW's current valuation metrics, including its Forward P/E ratio of 70.74. For comparison, its industry has an average Forward P/E of 45.51, which means PANW is trading at a premium to the group.

It is also worth noting that PANW currently has a PEG ratio of 2.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. PANW's industry had an average PEG ratio of 2.72 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 94, putting it in the top 38% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
 
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