Palo Alto Networks (PANW) closed at $199.88 in the latest trading session, marking a +2.09% move from the prior day. This move outpaced the S&P 500's daily gain of 0.14%. On the other hand, the Dow registered a loss of 0.04%, and the technology-centric Nasdaq increased by 0.38%.
Coming into today, shares of the security software maker had lost 1.74% in the past month. In that same time, the Computer and Technology sector gained 7.37%, while the S&P 500 gained 5.35%.
Market participants will be closely following the financial results of Palo Alto Networks in its upcoming release. On that day, Palo Alto Networks is projected to report earnings of $0.88 per share, which would represent year-over-year growth of 17.33%. Meanwhile, the latest consensus estimate predicts the revenue to be $2.5 billion, indicating a 14.17% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $3.27 per share and revenue of $9.19 billion, which would represent changes of +15.14% and +14.42%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Palo Alto Networks. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Palo Alto Networks presently features a Zacks Rank of #3 (Hold).
In the context of valuation, Palo Alto Networks is at present trading with a Forward P/E ratio of 59.8. For comparison, its industry has an average Forward P/E of 75.08, which means Palo Alto Networks is trading at a discount to the group.
We can additionally observe that PANW currently boasts a PEG ratio of 2.93. 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. PANW's industry had an average PEG ratio of 3.17 as of yesterday's close.
The Security industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 39, positioning it in the top 16% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
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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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