The latest trading session saw Palo Alto Networks (PANW) ending at $187.32, denoting a -0.2% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 0.53%. At the same time, the Dow added 0.93%, and the tech-heavy Nasdaq gained 0.22%.
The the stock of security software maker has fallen by 0.96% in the past month, lagging the Computer and Technology sector's gain of 3.02% and the S&P 500's gain of 2.69%.
Investors will be eagerly watching for the performance of Palo Alto Networks in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.75, reflecting a 2.74% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $2.24 billion, up 13.26% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.08 per share and revenue of $9.15 billion. These totals would mark changes of +8.45% and +13.96%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Palo Alto Networks. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 last 30 days, the Zacks Consensus EPS estimate has moved 0.13% lower. Palo Alto Networks is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, Palo Alto Networks currently has a Forward P/E ratio of 61.01. This represents a premium compared to its industry's average Forward P/E of 29.37.
Also, we should mention that PANW has a PEG ratio of 3.03. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Internet - Software stocks are, on average, holding a PEG ratio of 2.27 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 38, positioning it in the top 16% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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