Markets

Palo Alto Networks (PANW) Dips More Than Broader Markets: What You Should Know

A generic image of money and a calculator
Credit: Shutterstock photo

In the latest trading session, Palo Alto Networks (PANW) closed at $188.13, marking a -0.73% move from the previous day. This change lagged the S&P 500's 0.02% loss on the day. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq lost 0.39%.

Prior to today's trading, shares of the security software maker had gained 7.21% over the past month. This has outpaced the Computer and Technology sector's gain of 0.38% and the S&P 500's loss of 2.56% in that time.

Investors will be hoping for strength from PANW as it approaches its next earnings release, which is expected to be February 25, 2019. The company is expected to report EPS of $1.22, up 41.86% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $682.44 million, up 25.82% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.19 per share and revenue of $2.79 billion. These totals would mark changes of +30.08% and +22.87%, respectively, from last year.

Any recent changes to analyst estimates for PANW should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 has moved 17.1% higher within the past month. PANW currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that PANW has a Forward P/E ratio of 36.51 right now. This represents a discount compared to its industry's average Forward P/E of 48.51.

Also, we should mention that PANW has a PEG ratio of 1.56. 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 2.64 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 25, putting it in the top 10% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Palo Alto Networks, Inc. (PANW): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

PANW

Other Topics

Investing Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More