In the latest trading session, Palo Alto Networks (PANW) closed at $138.54, marking a +0.07% move from the previous day. This change lagged the S&P 500's 0.75% gain on the day. Meanwhile, the Dow gained 0.4%, and the Nasdaq, a tech-heavy index, added 10.36%.
Coming into today, shares of the security software maker had lost 16.94% in the past month. In that same time, the Computer and Technology sector lost 8.72%, while the S&P 500 lost 5.98%.
Palo Alto Networks will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.78, up 34.48% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.65 billion, up 25.16% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.43 per share and revenue of $6.89 billion. These totals would mark changes of +36.11% and +25.17%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Palo Alto Networks. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Palo Alto Networks is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, Palo Alto Networks is holding a Forward P/E ratio of 40.37. This represents a premium compared to its industry's average Forward P/E of 27.81.
Meanwhile, PANW's PEG ratio is currently 1.28. 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. Security stocks are, on average, holding a PEG ratio of 2.06 based on yesterday's closing prices.
The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 196, which puts it in the bottom 23% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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