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

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In the latest trading session, Palo Alto Networks (PANW) closed at $505.27, marking a -1.15% move from the previous day. This change lagged the S&P 500's 0.13% gain on the day. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.

Heading into today, shares of the security software maker had gained 0.09% over the past month, outpacing the Computer and Technology sector's loss of 13.84% and lagging the S&P 500's gain of 5.55% in that time.

Wall Street will be looking for positivity from Palo Alto Networks as it approaches its next earnings report date. In that report, analysts expect Palo Alto Networks to post earnings of $2.28 per share. This would mark year-over-year growth of 42.5%. Meanwhile, our latest consensus estimate is calling for revenue of $1.54 billion, up 26.65% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.45 per share and revenue of $5.5 billion, which would represent changes of +21.34% and +29.12%, respectively, from the prior year.

Investors might also notice 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Palo Alto Networks is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that Palo Alto Networks has a Forward P/E ratio of 68.58 right now. This represents a premium compared to its industry's average Forward P/E of 60.13.

Investors should also note that PANW has a PEG ratio of 2.18 right now. 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. The Security was holding an average PEG ratio of 2.89 at yesterday's closing price.

The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 75, which puts it in the top 30% 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.

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