Why Palo Alto Networks (PANW) Outpaced the Stock Market Today
The latest trading session saw Palo Alto Networks (PANW) ending at $259.21, denoting a +0.95% adjustment from its last day's close. This change outpaced the S&P 500's 0.43% gain on the day. Elsewhere, the Dow saw an upswing of 0.19%, while the tech-heavy Nasdaq appreciated by 0.71%.
The the stock of security software maker has risen by 4.5% in the past month, leading the Computer and Technology sector's loss of 1.56% and the S&P 500's loss of 2.1%.
Investors will be eagerly watching for the performance of Palo Alto Networks in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $1.16, marking a 39.76% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.84 billion, showing a 17.8% escalation compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $5.34 per share and a revenue of $8.18 billion, representing changes of +20.27% and +18.65%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications 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 reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. The Zacks Consensus EPS estimate has moved 0.16% higher within the past month. Palo Alto Networks is currently sporting a Zacks Rank of #1 (Strong Buy).
In terms of valuation, Palo Alto Networks is presently being traded at a Forward P/E ratio of 48.13. This represents a premium compared to its industry's average Forward P/E of 38.
One should further note that PANW currently holds a PEG ratio of 1.73. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.5.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 74, finds itself in the top 30% echelons 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report
