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

Zacks Equity Research

Palo Alto Networks (PANW) closed at $248.18 in the latest trading session, marking a -0.16% move from the prior day. This move lagged the S&P 500's daily loss of 0.06%. Meanwhile, the Dow lost 0.37%, and the Nasdaq, a tech-heavy index, added 0.24%.

Heading into today, shares of the security software maker had gained 17.11% over the past month, outpacing the Computer and Technology sector's gain of 6.28% and the S&P 500's gain of 4.72% in that time.

PANW will be looking to display strength as it nears its next earnings release, which is expected to be November 25, 2019. The company is expected to report EPS of $1.03, down 11.97% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $767.60 million, up 17.01% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.07 per share and revenue of $3.46 billion. These totals would mark changes of -6.97% and +19.46%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for PANW. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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 remained stagnant. PANW is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that PANW has a Forward P/E ratio of 49.04 right now. This valuation marks a premium compared to its industry's average Forward P/E of 43.33.

We can also see that PANW currently has a PEG ratio of 2.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Security stocks are, on average, holding a PEG ratio of 2.37 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 13, putting it in the top 6% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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