Palo Alto Networks (PANW) closed at $190.72 in the latest trading session, marking a +1.78% move from the prior day. The stock's change was more than the S&P 500's daily gain of 0.14%. Elsewhere, the Dow saw an upswing of 0.2%, while the tech-heavy Nasdaq appreciated by 0.27%.
The stock of security software maker has fallen by 4.52% in the past month, lagging the Computer and Technology sector's gain of 5.36% and the S&P 500's gain of 3.97%.
The investment community will be paying close attention to the earnings performance of Palo Alto Networks in its upcoming release. The company is expected to report EPS of $0.88, up 17.33% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $2.5 billion, indicating a 14.17% growth compared to the corresponding quarter of the prior year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.27 per share and a revenue of $9.19 billion, signifying shifts of +15.14% and +14.42%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for Palo Alto Networks. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Palo Alto Networks is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, Palo Alto Networks currently has a Forward P/E ratio of 57.24. Its industry sports an average Forward P/E of 71.99, so one might conclude that Palo Alto Networks is trading at a discount comparatively.
Meanwhile, PANW's PEG ratio is currently 2.81. 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. Security stocks are, on average, holding a PEG ratio of 2.98 based on yesterday's closing prices.
The Security industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 73, this industry ranks in the top 30% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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Palo Alto Networks, Inc. (PANW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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