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Palo Alto Networks (PANW) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Palo Alto Networks (PANW) closed at $499.32, marking a +1.44% move from the previous day. This change outpaced the S&P 500's 1.42% gain on the day. At the same time, the Dow added 0.97%, and the tech-heavy Nasdaq lost 0.07%.

Coming into today, shares of the security software maker had lost 0.35% in the past month. In that same time, the Computer and Technology sector gained 6.64%, while the S&P 500 gained 6.69%.

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 $2.28, up 42.5% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.54 billion, up 26.65% from the prior-year quarter.

PANW's full-year Zacks Consensus Estimates are calling for earnings of $7.45 per share and revenue of $5.5 billion. These results would represent year-over-year changes of +21.34% and +29.12%, respectively.

Investors should also note any recent changes to analyst estimates for Palo Alto Networks. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Palo Alto Networks is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, Palo Alto Networks is holding a Forward P/E ratio of 66.03. Its industry sports an average Forward P/E of 58.33, so we one might conclude that Palo Alto Networks is trading at a premium comparatively.

Also, we should mention that PANW has a PEG ratio of 2.1. 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. The Security was holding an average PEG ratio of 2.82 at yesterday's closing price.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 70, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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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