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Palo Alto Networks (PANW) Stock Sinks As Market Gains: Here's Why

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In the latest trading session, Palo Alto Networks (PANW - Free Report) closed at $297.50, marking a -1.1% move from the previous day. This change lagged the S&P 500's 0.14% gain on the day. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, added 0.16%.

Shares of the security software maker have appreciated by 8.27% over the course of the past month, outperforming the Computer and Technology sector's gain of 4.87% and the S&P 500's gain of 4.89%.

Analysts and investors alike will be keeping a close eye on the performance of Palo Alto Networks in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.30, signifying a 23.81% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.97 billion, up 19.08% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $5.49 per share and a revenue of $8.17 billion, demonstrating changes of +23.65% and +18.58%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Palo Alto Networks. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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, 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 has moved 4.35% higher within the past month. Palo Alto Networks presently features a Zacks Rank of #3 (Hold).

In terms of valuation, Palo Alto Networks is presently being traded at a Forward P/E ratio of 54.81. This signifies a premium in comparison to the average Forward P/E of 40.02 for its industry.

One should further note that PANW currently holds a PEG ratio of 1.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 1.81 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 37, this industry ranks in the top 15% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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