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

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Palo Alto Networks (PANW - Free Report) closed the most recent trading day at $172.83, moving -1.53% from the previous trading session. This change lagged the S&P 500's 0.16% gain on the day. On the other hand, the Dow registered a gain of 0.25%, and the technology-centric Nasdaq decreased by 0.06%.

Shares of the security software maker have depreciated by 9.94% over the course of the past month, underperforming the Computer and Technology sector's loss of 0.17% and the S&P 500's loss of 2.8%.

The investment community will be closely monitoring the performance of Palo Alto Networks in its forthcoming earnings report. On that day, Palo Alto Networks is projected to report earnings of $0.76 per share, which would represent year-over-year growth of 4.11%. Our most recent consensus estimate is calling for quarterly revenue of $2.24 billion, up 13.22% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $3.07 per share and a revenue of $9.15 billion, demonstrating changes of +8.1% and +13.98%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% higher. Palo Alto Networks currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Palo Alto Networks is currently trading at a Forward P/E ratio of 57.13. For comparison, its industry has an average Forward P/E of 29.33, which means Palo Alto Networks is trading at a premium to the group.

It's also important to note that PANW currently trades at a PEG ratio of 2.92. 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. Internet - Software stocks are, on average, holding a PEG ratio of 2.12 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 33, finds itself in the top 14% echelons of all 250+ industries.

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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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