In the latest trading session, Palo Alto Networks (PANW) closed at $330.30, marking a +1.35% move from the previous day. This change outpaced the S&P 500's 0.79% loss on the day. Elsewhere, the Dow saw a downswing of 0.26%, while the tech-heavy Nasdaq depreciated by 1.55%.
The security software maker's shares have seen an increase of 16.56% over the last month, surpassing the Computer and Technology sector's gain of 3.44% and the S&P 500's gain of 4.28%.
The upcoming earnings release of Palo Alto Networks will be of great interest to investors. The company is predicted to post an EPS of $0.97, indicating a 2.11% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $3.35 billion, reflecting a 32.1% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.77 per share and a revenue of $11.41 billion, representing changes of +12.87% and +23.71%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Palo Alto Networks. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term 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.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Palo Alto Networks is currently a Zacks Rank #3 (Hold).
In terms of valuation, Palo Alto Networks is presently being traded at a Forward P/E ratio of 86.45. This valuation marks a premium compared to its industry average Forward P/E of 49.95.
It is also worth noting that PANW currently has a PEG ratio of 6.51. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Security industry stood at 3.14 at the close of the market yesterday.
The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 109, which puts it in the top 45% 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.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Palo Alto Networks, Inc. (PANW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).