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Palo Alto Networks (PANW) Gains But Lags Market: What You Should Know

In the latest trading session, Palo Alto Networks (PANW) closed at $191.52, marking a +0.05% move from the previous day. This move lagged the S&P 500's daily gain of 1.19%. At the same time, the Dow added 1.24%, and the tech-heavy Nasdaq gained 8.36%.

Coming into today, shares of the security software maker had lost 4.29% in the past month. In that same time, the Computer and Technology sector gained 3%, while the S&P 500 lost 0.54%.

Wall Street will be looking for positivity from Palo Alto Networks as it approaches its next earnings report date. This is expected to be May 23, 2023. On that day, Palo Alto Networks is projected to report earnings of $0.92 per share, which would represent year-over-year growth of 53.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.71 billion, up 23.65% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.01 per share and revenue of $6.89 billion. These totals would mark changes of +59.13% and +25.16%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Palo Alto Networks. Recent revisions tend to reflect the latest 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. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Palo Alto Networks is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Palo Alto Networks's current valuation metrics, including its Forward P/E ratio of 47.75. This valuation marks a premium compared to its industry's average Forward P/E of 40.39.

It is also worth noting that PANW currently has a PEG ratio of 1.52. 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. Internet - Software stocks are, on average, holding a PEG ratio of 1.45 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 117, putting it in the top 47% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

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

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