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

In the latest trading session, Palo Alto Networks (PANW) closed at $499.11, marking a +0.1% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.08%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq lost 0.42%.

Coming into today, shares of the security software maker had lost 4.79% in the past month. In that same time, the Computer and Technology sector lost 5.11%, while the S&P 500 gained 0.22%.

Palo Alto Networks will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.65, up 6.45% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.28 billion, up 25.9% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.24 per share and revenue of $5.39 billion, which would represent changes of +17.92% and +26.57%, respectively, from the prior year.

Investors might also notice 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.

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, 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 remained stagnant within the past month. 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 68.86. Its industry sports an average Forward P/E of 66.61, so we one might conclude that Palo Alto Networks is trading at a premium comparatively.

It is also worth noting that PANW currently has a PEG ratio of 2.35. 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 Security industry currently had an average PEG ratio of 3.45 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 195, putting it in the bottom 24% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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