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

Zacks Equity Research
In the latest trading session, Dell Technologies (DELL) closed at $56.80, marking a -1.03% move from the previous day.

Palo Alto Networks (PANW) closed the most recent trading day at $235.48, moving -1.65% from the previous trading session. This move lagged the S&P 500's daily gain of 0.16%. At the same time, the Dow added 0.42%, and the tech-heavy Nasdaq gained 0.03%.

Heading into today, shares of the security software maker had lost 2.6% over the past month, lagging the Computer and Technology sector's gain of 4.43% and the S&P 500's gain of 2.89% in that time.

Wall Street will be looking for positivity from PANW as it approaches its next earnings report date. The company is expected to report EPS of $1.25, up 26.26% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $703.44 million, up 24.04% from the year-ago period.

PANW's full-year Zacks Consensus Estimates are calling for earnings of $5.46 per share and revenue of $2.87 billion. These results would represent year-over-year changes of +36.84% and +26.07%, respectively.

Any recent changes to analyst estimates for PANW should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

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

In terms of valuation, PANW is currently trading at a Forward P/E ratio of 43.84. Its industry sports an average Forward P/E of 44.76, so we one might conclude that PANW is trading at a discount comparatively.

We can also see that PANW currently has a PEG ratio of 1.87. 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 2.74 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 165, which puts it in the bottom 36% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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