Palo Alto Networks (PANW) closed at $184.22 in the latest trading session, marking a +2.24% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.5%. Elsewhere, the Dow saw an upswing of 0.64%, while the tech-heavy Nasdaq appreciated by 0.43%.
Heading into today, shares of the security software maker had lost 4.39% over the past month, lagging the Computer and Technology sector's loss of 0.15% and the S&P 500's gain of 0.18%.
The upcoming earnings release of Palo Alto Networks will be of great interest to investors. In that report, analysts expect Palo Alto Networks to post earnings of $0.93 per share. This would mark year-over-year growth of 14.81%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.58 billion, up 14.33% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.84 per share and revenue of $10.52 billion. These totals would mark changes of +14.97% and +14.1%, respectively, from last year.
Any recent changes to analyst estimates for Palo Alto Networks should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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, 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 shifted 0.32% downward. Right now, Palo Alto Networks possesses a Zacks Rank of #4 (Sell).
Looking at its valuation, Palo Alto Networks is holding a Forward P/E ratio of 46.89. Its industry sports an average Forward P/E of 51.05, so one might conclude that Palo Alto Networks is trading at a discount comparatively.
Meanwhile, PANW's PEG ratio is currently 2.32. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Security industry stood at 2.85 at the close of the market yesterday.
The Security industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 98, positioning it in the top 40% 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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Palo Alto Networks, Inc. (PANW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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