Palo Alto Networks Inc. shares are basking in the ultimate relief rally Monday after the company’s Friday night earnings scare proved a fakeout. TipRanks’ analyst ranking service pinpoints Wall Street’s best-performing stocks, including Nvidia and Palo Alto. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Data are provided ‘as is’ for informational purposes only and are not intended for trading purposes. Data may be intentionally advertising elasticity of demand formula delayed pursuant to supplier requirements. But one industry that doesn’t need to fake its connection to AI is cybersecurity.
According to TipRanks, Eyal is a top 25 analyst with an average return of 25.8% and a 69.96% success rate. Eyal covers the Technology sector, focusing on stocks such as Palo Alto Networks, Check Point, and Verint Systems. Zscaler reports a strong quarter, but Palo Alto Networks is still the top cybersecurity pick for CNBC’s Jim Cramer. Palo Alto Networks is heavily focusing on AI to power its cybersecurity software products. Palo Alto Networks provides network security to businesses and government entities, safely enabling the applications running on their networks. The technique has proven to be very useful for finding positive surprises.
TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities. Yahoo Finance anchor Seana Smith reports on Palo Alto stock up following the earnings report. Constellation Research Founder Ray Wang joins Seana and fellow anchor Diane King Hall to discuss P…
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Of the 36 recommendations that derive the current ABR, 31 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 86.1% and 5.6% of all recommendations. Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let’s see what these Wall Street heavyweights think about Palo Alto Networks (PANW). Independent Solutions Wealth Management Portfolio Manager Paul Meeks joins Yahoo Finance anchor Julie Hyman to discuss Palo Alto Networks’ earnings results, which he calls « the one » long-term cybersec… Palo Alto Networks delivered strong quarterly profits to end its fiscal year. The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries.
Five years ago, Palo Alto Networks was primarily a next-gen firewall business that sold hardware and subscriptions. However, the company’s visionary CEO, Nikesh Arora, recognized the need to move into the cloud and address future cybersecurity needs. He also realized that recurring revenue through software-as-a-service (SaaS) offerings was essential to the business. Cyber peers trade at slightly higher NTM revenue multiples overall despite lower FCF margins and revenue growth (overall pretty marginal differences, however an extra turn on the revenue multiple is ~10% delta in market cap). I think the better comp set moving forward will be large-cap tech given the favorable growth profile of the cyber industry and the recession-resilient business models.
In a report released on August 30, Westpark Capital also initiated coverage with a Buy rating on the stock with a $340.00 price target. PANW, +1.02% surged 8% after the cybersecurity company’s unusual late Friday report revealed earnings and a billings outlook above Street estimates as AI-backed cyber… Zooming in on valuation, it is apparent that despite PANW’s superior cash flow profile, NGS platform and market leading position that the company still trades at a relative discount both to software peers and to large-cap tech peers. PCE has dramatically outpaced private investment in 2023 and is a sign that the economic expansion is in late stages in my opinion.
Palo Alto Networks stock price target raised to $260 vs. $220 at UBS
‘Mad Money’ host Jim Cramer talk the day’s market action, how to play the current market and more. Palo Alto Networks Chairman and CEO Nikesh Arora goes one-on-one with ‘Mad Money’ host Jim Cramer to talk quarterly results, cybersecurity, competition in the space and more. The problem was valuation, fears of slowing growth and threats of a looming recession. According to the Q2 reporting season, growth is slowing but still robust and above consensus. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The Style Scores are a complementary set of indicators to use alongside the Zacks Rank.
- The problem was valuation, fears of slowing growth and threats of a looming recession.
- Q4 was the nail in the coffin for my Buy recommendation as profitability substantially improved and the revenue mix was indicative of the success of the NGS products.
- I’m skeptical of these claims and while the sector might overall be less cyclical than manufacturing it is not immune (in ‘08 similar claims were made about the housing market being recession proof).
- In conclusion, PANW is an industry-leading cybersecurity business with a comprehensive end-to-end product offering and complementary product lineup creating a durable platform with high profitability and recurring revenue base.
- The consensus among Wall Street research analysts is that investors should « moderate buy » PANW shares.
The company deserves more time in the spotlight, and the stock should get serious consideration from tech investors. Cybersecurity is also a desirable industry in case of a recession or economic slowdown. Companies can cut costs on advertising or labor but cannot afford to cut back on cybersecurity.
If the personal savings rate were to return to pre-pandemic levels there would be a significant drop in demand which would likely be enough to tip the US economy into a slowdown. Shares of Palo Alto Networks split before market open on Wednesday, September 14th 2022. The newly created shares were distributed to shareholders https://1investing.in/ after the market closes on Tuesday, September 13th 2022. An investor that had 100 shares of stock prior to the split would have 300 shares after the split. Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
Palo Alto Networks’ growth strategy focuses on expanding its product offerings and increasing its market share in the cybersecurity market. The company has made a number of strategic acquisitions in recent years, including Demisto, a security orchestration and automation company and Twistlock, a container security company. These acquisitions have allowed Palo Alto Networks to broaden its product portfolio and enter new markets. In addition to its NGFW product line, Palo Alto Networks offers a range of cloud-based security solutions. Its Prisma Cloud platform provides comprehensive security for cloud-based applications and data. Palo Alto Network has also developed the Cortex XDR platform, which provides endpoint detection and response (EDR) capabilities.
Other products include Prisma Cloud, which provides security for cloud-native applications. More and more businesses run software programs in the cloud nowadays, and the shift is permanent. The market has obviously priced software / cloud focused peers at a premium relative to hardware focused peers. PANW has gotten some credit for its transition to a Next-Gen security products however I believe the market is still underrating this move given that Next-Gen revenue is approaching 50% of total revenue. Over time as PANW establishes it’s NGS platform I believe it’s valuation will converge towards the software peer set which has historically traded ~4x above PANW on an LTM revenue basis.
Palo Alto Networks Stock Rallies 16% After Earnings Fiasco Turns Out To Be Nothing
If you’re the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies. Analysts’ growing optimism over the company’s earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term. Based on the recent corporate insider activity of 91 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PANW in relation to earlier this year.
A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month.
The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. The below chart from JPM shows their estimate for excess savings from the COVID expansion / stimulus checks. An estimated $2.1T of excess savings were present in the economy at the peak in 2021 but have now been reduced to $0.3T and at the current rate of degradation shouldn’t last through the next quarter. Consumer credit card debt sits at record levels further indicating the stretched consumer balance sheet.
PANW shares fell on Tuesday in sympathy with Oracle ORCL, which dropped after issuing soft guidance. Palo Alto Networks’ innovation has driven revenue growth from $3.4 billion in fiscal 2020 to $6.9 billion in fiscal 2023. The best part is that the vast majority of this revenue is now recurring, as shown below.
The disappointing news impacted software stocks, with Palo Alto Networks trading lower by nearly 3% on Tuesday. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Every tech company seems to be scrambling to let investors know it is into AI, but Palo Alto Networks was in this arena before the hype.
Palo Alto (NASDAQ:PANW): A Long-Term, No-Brainer Stock
Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; and Panorama, a security management solution for the global control of network security platform as a virtual or a physical appliance. Palo Alto Networks, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style. The scores are based on the trading styles of Value, Growth, and Momentum. There’s also a VGM Score (‘V’ for Value, ‘G’ for Growth and ‘M’ for Momentum), which combines the weighted average of the individual style scores into one score. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.
More value-oriented stocks tend to represent financial services, utilities, and energy stocks. In conclusion, PANW is an industry-leading cybersecurity business with a comprehensive end-to-end product offering and complementary product lineup creating a durable platform with high profitability and recurring revenue base. The market has yet to get the Company full credit for its shift away from the traditional hardware business and overtime I believe the stock will trade in line with blue-chip large-cap tech stocks. 42 Wall Street research analysts have issued « buy, » « hold, » and « sell » ratings for Palo Alto Networks in the last twelve months. There are currently 3 hold ratings and 39 buy ratings for the stock. The consensus among Wall Street research analysts is that investors should « moderate buy » PANW shares.
Palo Alto Networks Stock Jumps as Earnings Top Estimates
Another positive note for the company is the improvement in G&A spend (down to 5.6% of revenue from 7.1%) as well as the reduction in share-based comp (down 2.2% as a percentage of revenue YoY). PANW has performed well over the past year and Q4 earnings were well received by the market with the stock trading back up to near all-time highs. Palo Alto Networks is a leading cybersecurity company with a strong financial profile and a proven track record of delivering innovative and effective security solutions. With its focus on expanding its product offerings and global footprint, the company is positioned for continued growth in the cybersecurity market. Palo Alto Networks’ solutions are trusted by some of the world’s largest and most security-conscious organizations, including government agencies, financial institutions and healthcare providers.
- Its Prisma Cloud platform provides comprehensive security for cloud-based applications and data.
- For example, its latest product, Cortex XSIAM, uses AI to improve security operations, detect and manage threats, and automate many processes.
- The company has developed a reputation for delivering innovative and effective security solutions and it has been recognized by industry analysts for its leadership in the cybersecurity market.
- Palo Alto Networks Inc. shares are basking in the ultimate relief rally Monday after the company’s Friday night earnings scare proved a fakeout.
- Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days.
It allows the user to better focus on the stocks that are the best fit for his or her personal trading style. PANW’s beta can be found in Trading Information at the top of this page. A stock’s beta measures how closely tied its price movements have been to the performance of the overall market. Morningstar analysts hand-select direct competitors or comparable companies to
provide context on the strength and durability of PANW’s
competitive advantage. Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%. An industry with a larger percentage of Zacks Rank #1’s and #2’s will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4’s and #5’s. • Challenges in transitioning from hardware to more software and service-centric models in certain areas. Upgrade to MarketBeat All Access to add more stocks to your watchlist.
Time will tell but obviously trying to predict the exact timing of a recession is not a good investment strategy. Dividend yield allows investors, particularly those interested in dividend-paying stocks,
to compare the relationship between a stock’s price and how it rewards stockholders through dividends. The formula for calculating dividend yield is to divide the annual dividend paid per share by the stock price. Currently, the analyst consensus on Palo Alto Networks is a Strong Buy with an average price target of $279.81, implying a 10.54% upside from current levels.