Palo Alto Networks (PANW) Stock Sinks As Market Gains: What You Should Know
Palo Alto Networks (PANW) closed the most recent trading day at $191.55, moving -1.21% from the previous trading session. This change lagged the S&P 500's 0.56% gain on the day. Elsewhere, the Dow gained 0.41%, while the tech-heavy Nasdaq added 1.35%.
Prior to today's trading, shares of the security software maker had gained 2.73% over the past month. This has lagged the Computer and Technology sector's gain of 6.41% and outpaced the S&P 500's loss of 1.48% in that time.
Investors will be hoping for strength from Palo Alto Networks as it approaches its next earnings release. The company is expected to report EPS of $0.92, up 53.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.71 billion, up 23.65% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.01 per share and revenue of $6.89 billion, which would represent changes of +59.13% and +25.18%, respectively, from the prior year.
Any recent changes to analyst estimates for Palo Alto Networks should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 30.78% higher. Palo Alto Networks is holding a Zacks Rank of #2 (Buy) right now.
Looking at its valuation, Palo Alto Networks is holding a Forward P/E ratio of 48.36. For comparison, its industry has an average Forward P/E of 29.68, which means Palo Alto Networks is trading at a premium to the group.
Meanwhile, PANW's PEG ratio is currently 1.54. 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 2.34 based on yesterday's closing prices.
The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 72, putting it in the top 29% 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.
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