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

Palo Alto Networks (PANW) closed at $516.51 in the latest trading session, marking a -1.02% move from the prior day. This change lagged the S&P 500's daily loss of 0.07%. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq lost 0.04%.

Coming into today, shares of the security software maker had gained 5.76% in the past month. In that same time, the Computer and Technology sector gained 8.42%, while the S&P 500 gained 8.06%.

Investors will be hoping for strength from Palo Alto Networks as it approaches its next earnings release, which is expected to be August 22, 2022. The company is expected to report EPS of $2.28, up 42.5% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.54 billion, up 26.65% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Palo Alto Networks. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 holding a Zacks Rank of #2 (Buy) right now.

Investors should also note Palo Alto Networks's current valuation metrics, including its Forward P/E ratio of 56.31. This represents a premium compared to its industry's average Forward P/E of 51.65.

We can also see that PANW currently has a PEG ratio of 1.79. 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. PANW's industry had an average PEG ratio of 2.59 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 74, putting 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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