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Palo Alto Networks (PANW - Free Report) is a Zacks Rank #1 (Strong Buy) that is a cybersecurity company offering network security solutions to enterprises, service providers and government entities worldwide.
PANW has been one of the best performers of 2023 and a recent earnings report has strengthened the bullish vision for the company. The stock is now just 10% off its all-time highs, something most tech companies can not claim.
The question for investors seems to be not if, but when those highs are taken out. Investor’s eyeing the stock should gobble up every dip and look for PANW to continue this momentum for the rest of the year.
More about Palo Alto
The company incorporated in 2005 and is headquartered in Santa Clara, California. It employs over 12,000 and has a market cap of $58 billion.
The company offers firewall appliances and software, subscription services for cyber threats, cloud security, professional services and more. Palo Alto sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers, and government entities operating in various industries
The stock has a Zacks Style Score of “A” in Growth, but “F” in Value. The Forward PE is 48 and the stock pays no dividend.
Q2 Earnings
Palo Alto reported earnings in late February and blew away expectations. The 35% surprise beat was the company’s best performance on record. The company is used to beating earnings expectations, but this one was big in magnitude.
Palo reported Q2 at $1.05 v the $0.78 expected. The company guided Q3 at $0.90-0.94 v the $0.79 expected and raised total billings to $9.10-9.20B v the $8.95-9.05B prior. Year over year billions were $2.03B v the $1.61B expected.
Management cited the performance of their software-based and cloud-delivered portfolio as a reason for their ability to raise guidance.
Estimates Rising
The strong quarter has analysts raising estimates aggressively.
Over the last 30 days, the current quarters estimates have gone from $0.79 to $0.92, or 16% higher. Expectations for next quarter have been lifted as well, with estimates going up by 15%.
Looking down the road, estimates have been flying high since the earnings report. For the current year, we have seen estimates go from $3.42 to $3.96 over the last month, or 15%. For next year, estimates spiked to $4.62 from $4.01, or 15%.
Since Palo Alto reported earnings, almost every analyst on Wall Street has raised their price targets for the stock.
Citigroup has a Buy on the stock and raised their price target from $195 to $220.
Piper/Sandler has an Overweight on the name and raised their target to $240 from $220.
Morgan Stanley is one of the most bullish firms, reiterating their Overweight and $255 target, up from the previous target of $240.
The Technical Take
Like many names in tech, PANW had a rough 2021, down about 35% from the all-time highs. However, the buyers started to come in after the first few weeks of 2023. The stock rallied 20% into earnings and is now up 35% on the year.
Many investors would be happy with those returns and look to take profits in the current market atmosphere. But the chart looks very bullish and there is room to be greedy.
Looking at Fib extensions we have two targets above that seem achievable. The first target is found by drawing a Fibonacci retracement from November highs to 2023 lows. The 161.8% extension is $208.50. From there we could get a pullback as sellers come in just below all-time highs.
The bigger target can be found by drawing a Fibonacci retracement from the all-time highs to 2023 lows. The 161.8% retracement is $263, which lines up close to Morgan Stanleys bullish $255 target.
Most investors don’t want to chase a stock in this market, so below are some levels for those looking to buy the dip:
Gap fill: $178
21-day Moving Average (MA): $175
200-day MA: $165
50-day MA: 157
In Summary
Palo Alto is posting big numbers and seeing earnings growth in a tech sector that has been struggling. The company is best of breed in cybersecurity and investors should expect PANW to lead the way in 2023.
Buy the dippers should take advantage of any sell off and look for a move above all-time highs into the end of the year.
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Bull of the Day: Palo Alto Networks (PANW)
Palo Alto Networks (PANW - Free Report) is a Zacks Rank #1 (Strong Buy) that is a cybersecurity company offering network security solutions to enterprises, service providers and government entities worldwide.
PANW has been one of the best performers of 2023 and a recent earnings report has strengthened the bullish vision for the company. The stock is now just 10% off its all-time highs, something most tech companies can not claim.
The question for investors seems to be not if, but when those highs are taken out. Investor’s eyeing the stock should gobble up every dip and look for PANW to continue this momentum for the rest of the year.
More about Palo Alto
The company incorporated in 2005 and is headquartered in Santa Clara, California. It employs over 12,000 and has a market cap of $58 billion.
The company offers firewall appliances and software, subscription services for cyber threats, cloud security, professional services and more. Palo Alto sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers, and government entities operating in various industries
The stock has a Zacks Style Score of “A” in Growth, but “F” in Value. The Forward PE is 48 and the stock pays no dividend.
Q2 Earnings
Palo Alto reported earnings in late February and blew away expectations. The 35% surprise beat was the company’s best performance on record. The company is used to beating earnings expectations, but this one was big in magnitude.
Palo reported Q2 at $1.05 v the $0.78 expected. The company guided Q3 at $0.90-0.94 v the $0.79 expected and raised total billings to $9.10-9.20B v the $8.95-9.05B prior. Year over year billions were $2.03B v the $1.61B expected.
Management cited the performance of their software-based and cloud-delivered portfolio as a reason for their ability to raise guidance.
Estimates Rising
The strong quarter has analysts raising estimates aggressively.
Over the last 30 days, the current quarters estimates have gone from $0.79 to $0.92, or 16% higher. Expectations for next quarter have been lifted as well, with estimates going up by 15%.
Looking down the road, estimates have been flying high since the earnings report. For the current year, we have seen estimates go from $3.42 to $3.96 over the last month, or 15%. For next year, estimates spiked to $4.62 from $4.01, or 15%.
Since Palo Alto reported earnings, almost every analyst on Wall Street has raised their price targets for the stock.
Citigroup has a Buy on the stock and raised their price target from $195 to $220.
Piper/Sandler has an Overweight on the name and raised their target to $240 from $220.
Morgan Stanley is one of the most bullish firms, reiterating their Overweight and $255 target, up from the previous target of $240.
The Technical Take
Like many names in tech, PANW had a rough 2021, down about 35% from the all-time highs. However, the buyers started to come in after the first few weeks of 2023. The stock rallied 20% into earnings and is now up 35% on the year.
Many investors would be happy with those returns and look to take profits in the current market atmosphere. But the chart looks very bullish and there is room to be greedy.
Looking at Fib extensions we have two targets above that seem achievable. The first target is found by drawing a Fibonacci retracement from November highs to 2023 lows. The 161.8% extension is $208.50. From there we could get a pullback as sellers come in just below all-time highs.
The bigger target can be found by drawing a Fibonacci retracement from the all-time highs to 2023 lows. The 161.8% retracement is $263, which lines up close to Morgan Stanleys bullish $255 target.
Most investors don’t want to chase a stock in this market, so below are some levels for those looking to buy the dip:
Gap fill: $178
21-day Moving Average (MA): $175
200-day MA: $165
50-day MA: 157
In Summary
Palo Alto is posting big numbers and seeing earnings growth in a tech sector that has been struggling. The company is best of breed in cybersecurity and investors should expect PANW to lead the way in 2023.
Buy the dippers should take advantage of any sell off and look for a move above all-time highs into the end of the year.