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Here's Why Palo Alto Networks (PANW) Gained But Lagged the Market Today

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In the latest trading session, Palo Alto Networks (PANW - Free Report) closed at $333.23, marking a +0.64% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 1.69% for the day. Meanwhile, the Dow experienced a rise of 1.04%, and the technology-dominated Nasdaq saw an increase of 2.43%.

The the stock of security software maker has fallen by 2.88% in the past month, leading the Computer and Technology sector's loss of 9.75% and the S&P 500's loss of 4.78%.

Investors will be eagerly watching for the performance of Palo Alto Networks in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on August 19, 2024. The company is predicted to post an EPS of $1.41, indicating a 2.08% decline compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $2.16 billion, indicating a 10.64% upward movement from the same quarter last year.

Investors should also pay attention to any latest changes in analyst estimates for Palo Alto Networks. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 past month, the Zacks Consensus EPS estimate has remained steady. Palo Alto Networks is holding a Zacks Rank of #3 (Hold) right now.

With respect to valuation, Palo Alto Networks is currently being traded at a Forward P/E ratio of 53.42. Its industry sports an average Forward P/E of 29.15, so one might conclude that Palo Alto Networks is trading at a premium comparatively.

It's also important to note that PANW currently trades at a PEG ratio of 2.4. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Software industry currently had an average PEG ratio of 1.78 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 38% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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