Palo Alto Networks Inc. (NASDAQ: PANW) Inclines 1.52%: This $68.15 billion Stock Can Fell -23.07%

The trading price of Palo Alto Networks Inc. (NASDAQ:PANW) floating higher at last check on Monday, June 12, closing at $223.45, 1.52% higher than its previous close.

Traders who pay close attention to intraday price movement should know that it has been fluctuating between $219.31 and $224.78. The company’s P/E ratio in the trailing 12-month period was 345.53, while its 5Y monthly beta was 1.17. In examining the 52-week price action we see that the stock hit a 52-week high of $230.18 and a 52-week low of $132.22. Over the past month, the stock has gained 13.32% in value.

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Palo Alto Networks Inc., whose market valuation is $68.15 billion at the time of this writing, is expected to release its quarterly earnings report Aug 21, 2023 – Aug 25, 2023. Investors’ optimism about the company’s current quarter earnings report is understandable. Analysts have predicted the quarterly earnings per share to grow by $1.28 per share this quarter, however they have predicted annual earnings per share of $4.27 for 2023 and $4.98 for 2024. It means analysts are expecting annual earnings per share growth of 69.40% this year and 16.60% next year.

Analysts have forecast the company to bring in revenue of $1.96 billion for the current quarter, with the likely lows of $1.95 billion and highs of $1.97 billion. The average estimate suggests sales will likely up by 26.30% this quarter compared to what was recorded in the comparable quarter last year. From the analysts’ viewpoint, the consensus estimate for the company’s annual revenue in 2023 is $6.9 billion. The company’s revenue is forecast to grow by 25.40% over what it did in 2023.

A company’s earnings reviews provide a brief indication of a stock’s direction in the short term, where in the case of Palo Alto Networks Inc. 1 upward and no downward comments were posted in the last 7 days. On the technical side, indicators suggest PANW has a 100% Buy on average for the short term. According to the data of the stock’s medium term indicators, the stock is currently averaging as a 100% Buy, while an average of long term indicators suggests that the stock is currently 100% Buy.

Here is the average analyst rating on the stock as represented by 1.00 to 5.00, with the extremes of 1.00 and 5.00 suggesting the stock should be considered as either strong buy or strong sell respectively. The number of analysts that have assigned PANW a recommendation rating is 40. Out of them, 4 rate it a Hold, while 31 recommend Buy, whereas 5 assign an Overweight rating. 0 analyst(s) have tagged Palo Alto Networks Inc. (PANW) as Underweight, while 0 advise Sell. Analysts have rated the stock Buy, likely urging investors to take advantage of the opportunity to add to their holdings of the company’s shares.

If we dig deeper into the stock’s outlook, we see that the stock’s PEG is 10.20, which symbolizes a positive outlook. A quick review shows that PANW’s price is currently 8.21% off the SMA20 and 13.16% off the SMA50. The RSI metric on the 14-day chart is currently showing 65.96, and weekly volatility stands at 2.93%. When measured over the past 30 days, the indicator reaches 2.94%. Palo Alto Networks Inc. (NASDAQ:PANW)’s beta value is currently sitting at 1.16, while the Average True Range indicator is currently displaying 6.29. With analysts defining $180.00-$275.00 as the low and high price targets, we arrive at a consensus price target of $240.88 for the trailing 12-month period. The current price is about 19.45% off the estimated low and -23.07% off the forecast high, based on this estimate. Investors will be thrilled if PANW’s share price rises to $241.00, which is the median consensus price. At that level, PANW’s share price would be -7.85% below current price.

To see how Palo Alto Networks Inc. stock has been performing today in comparison to its peers in the industry, here are the numbers: PANW stock’s performance was 1.52% at last check in today’s session, and 29.88% in the past year, while Check Point Software Technologies Ltd. (CHKP) has been trading -0.49% in recent session and positioned -0.02% lower than it was a year ago. Another comparable company HP Inc. (HPQ) saw its stock trading 1.71% higher in today’s session but was down -17.34% in a year. Furthermore, Intel Corporation (INTC) showed an increase of 5.15% today while its price kept declining at -17.63% over the past year. Palo Alto Networks Inc. has a P/E ratio of 345.53, compared to Check Point Software Technologies Ltd.’s 19.14 and HP Inc.’s 11.31. Also during today’s trading, the S&P 500 Index has surged 0.30%, while the Dow Jones Industrial also saw a positive session, up 0.12% today.

An evaluation of the daily trading volume of Palo Alto Networks Inc. (NASDAQ:PANW) indicates that the 3-month average is 4.21 million. However, this figure has increased over the past 10 days to an average of 6.3 million.

Currently, records show that 303.90 million of the company’s shares remain outstanding. The insiders hold 1.40% of outstanding shares, whereas institutions hold 87.30%. The stats also highlight that short interest as of May 14, 2023, stood at 20.93 million shares, resulting in a short ratio of 6.31 at that time. From this, we can conclude that short interest is 6.84% of the company’s total outstanding shares. It is noteworthy that short shares in May were up slightly from the previous month’s figure, which was 18.08 million. However, since the stock’s price has seen 60.13% year-to-date, investors’ interest is likely to be reignited due to its potential to move even higher.

Up 50% in 2023, Is Palo Alto Networks Stock Still a Buy Now?

Palo Alto (PANW) to Report Q3 Earnings: What's in the Cards?

Palo Alto Networks PANW is scheduled to report its third-quarter fiscal 2023 results on May 23.

Palo Alto projects its fiscal third-quarter revenues in the $1.695-$1.725 billion range, suggesting a year-over-year increase of 22%-24%. The Zacks Consensus Estimate for the same is pegged at $1.71 billion, implying growth of 23.7% from the year-ago reported figure.

For the fiscal third quarter, the company expects non-GAAP earnings in the range of 90-94 cents per share. The Zacks Consensus Estimate for PANW’s non-GAAP earnings stands at 92 cents per share, indicating an increase of 53.3% from the year-ago quarter’s earnings of 60 cents.

Palo Alto’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 17.2%.

Palo Alto Networks, Inc. Price and EPS Surprise

Palo Alto Networks, Inc. Price and EPS Surprise

Palo Alto Networks, Inc. price-eps-surprise | Palo Alto Networks, Inc. Quote

In the third quarter, Palo Alto is likely to have benefited from the strong momentum stemming from deal wins, which is expected to have boosted its top line. The strong demand for form factor hardware products, particularly machine learning-powered models that ensure zero-trust network security for organizations, is expected to have contributed to the quarterly performance.

The growing and accelerated migration to the cloud in a post-pandemic era is likely to have boosted the adoption of the aforementioned platforms. The company projects year-over-year billings growth between 22% and 25% ($2.20 billion-$2.25 billion) in the to-be-reported quarter.

Moreover, the increased use of the cloud and remote networks amid a hybrid working environment has resulted in escalating cyberattacks currently. This is leading to a rise in the demand for cybersecurity solutions. PANW’s fiscal third-quarter performance is likely to have benefited from this demand surge.

Palo Alto has been gaining from the Bridgecrew acquisition, which forms the crux of the Prisma public cloud and Xpanse, which form the basis of Cortex. Prisma and Cortex are likely to have continued performing well in the fiscal third quarter as well.

Story continues

Federal Risk and Authorization Management Program (FedRAMP) recognitions are boosting the adoption of Palo Alto’s products by government organizations. The company’s Prisma Access, Cortex XDR, Cortex Data Lake, Prisma Cloud and WildFire received FedRAMP recognitions.

This FedRAMP recognition reflects the U.S. public sector’s trust in Palo Alto’s IoT security solutions. This is anticipated to have encouraged the adoption of its products during the period in discussion.

Our proven model does not conclusively predict an earnings beat for PANW this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Though Palo Alto currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Per our model, HP Inc. HPQ, Agilent A and NVIDIA NVDA have the right combination of elements to post an earnings beat in their upcoming releases.

HP is set to report second-quarter fiscal 2023 results on May 30. The company has a Zacks Rank #2 and an Earnings ESP of +2.24% at present. HP’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for HPQ’s second-quarter earnings is pegged at 76 cents per share, suggesting a decline of 29.6% from the year-ago quarter’s earnings of $1.11. HP’s quarterly revenues are estimated to decrease 19.9% year over year to $13.21 billion.

Agilent carries a Zacks Rank #3 and has an Earnings ESP of +0.40%. The company is scheduled to report second-quarter fiscal 2023 results on May 23. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 7%.

The Zacks Consensus Estimate for Agilent’s second-quarter earnings stands at $1.27 per share, implying a year-over-year increase of 12.4%. It is estimated to report revenues of $1.67 billion, which suggests an increase of approximately 3.8% from the year-ago quarter.

NVIDIA carries a Zacks Rank #3 and has an Earnings ESP of +2.43%. The company is slated to report first-quarter fiscal 2024 results on May 24. Its earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being -3.2%.

The Zacks Consensus Estimate for NVDA’s first-quarter earnings is pegged at 92 cents per share, indicating a year-over-year decline of 32.4%. The consensus mark for revenues stands at $6.51 billion, suggesting a year-over-year drop of 21.5%.

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