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Palo Alto Networks (PANW) Dips More Than Broader Market: What You Should Know

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Palo Alto Networks (PANW - Free Report) ended the recent trading session at $371.97, demonstrating a -1.31% swing from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.1%. At the same time, the Dow added 0.33%, and the tech-heavy Nasdaq lost 0.3%.

Shares of the security software maker witnessed a gain of 15.88% over the previous month, beating the performance of the Computer and Technology sector with its gain of 11.35% and the S&P 500's gain of 5.78%.

Market participants will be closely following the financial results of Palo Alto Networks in its upcoming release. The company plans to announce its earnings on February 20, 2024. The company's earnings per share (EPS) are projected to be $1.30, reflecting a 23.81% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.97 billion, up 19.08% from the prior-year quarter.

PANW's full-year Zacks Consensus Estimates are calling for earnings of $5.49 per share and revenue of $8.17 billion. These results would represent year-over-year changes of +23.65% and +18.58%, respectively.

Investors should also take note of any recent adjustments to analyst estimates for Palo Alto Networks. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection remained stagnant. Palo Alto Networks is currently sporting a Zacks Rank of #3 (Hold).

Looking at valuation, Palo Alto Networks is presently trading at a Forward P/E ratio of 68.68. This valuation marks a premium compared to its industry's average Forward P/E of 32.97.

One should further note that PANW currently holds a PEG ratio of 2.49. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software was holding an average PEG ratio of 1.67 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 77, placing it within the top 31% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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