Palo Alto Networks, Inc PANW Stock Price, Quote & News

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide. The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every “Strong Sell” recommendation, brokerage firms assign five “Strong Buy” recommendations. Palo Alto Networks reassured analysts with its earnings report after a brief panic over its unusual timing.

Founded in 2005, Palo Alto Networks has become a market leader in next-generation firewall technology and cloud-based security solutions. Palo Alto Networks is a platform-based cybersecurity vendor with product offerings covering network security, cloud security, and security operations. The California-based firm has more than 85,000 customers across the world, including more than three fourths of the Global capitalized cost 2000. We are raising our fair value estimate to $245 from $225 for wide-moat Palo Alto Networks after the firm closed out fiscal 2023 with a robust set of results coupled with medium-term sales guidance ahead of our prior estimates. Whereas competitors like Fortinet have seen macro pressures affect forward-looking metrics such as billings, Palo Alto’s forward-looking metrics remained strong for the quarter.

Companies need 2-3 year road maps to modernize and create an AI stack: Palo Alto Networks CEO

Looking at the light green private domestic investment line on the above chart you can see that typically drops this severe in investment only happen in recessions or on the brink of a recession. Businesses however are less optimistic about the state of the economy and have been tepid in their investment as they wait for signs that demand will continue to be strong past this year. Palo Alto Networks issued an update on its FY 2024 earnings guidance on Friday, August, 18th.

We believe this strength is a result of the firm’s efficient go-to-market motion and its wide range of products that have helped insulate the firm from macro-induced contractions in demand. Following a sharp increase after hours, we view Palo Alto shares trading in the 3-star range following our fair value increase. Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns. California-based Palo Alto Networks, Inc., founded in 2005, is a global cybersecurity leader.

Jim Cramer calls Palo Alto Networks’ CEO the Tom Brady of executives

Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. High-growth stocks tend to represent the technology, healthcare, and communications sectors. They rarely distribute dividends to shareholders, opting for reinvestment in their businesses.

Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. Palo Alto currently has an average brokerage recommendation (ABR) of 1.22, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 36 brokerage firms. Palo Alto Networks is a compelling stock to own as it gains share in the increasingly important cybersecurity market, CNBC’s Jim Cramer said. The cybersecurity industry has emerged as a critical pillar in the modern business landscape, addressing the ever-growing need to safeguard digital assets and data.

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After spooking Wall Street for weeks with its plans to report earnings after Friday’s closing bell, Palo Alto Networks Inc.’s mysterious move turned out to be much ado about nothing. Palo Alto Networks’ terrific performance is finally turning the markets’ heads. The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.

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.

Palo Alto Networks’ flagship product is its Next-Generation Firewall (NGFW) which provides advanced security features such as intrusion prevention, application control and threat prevention. The NGFW is designed to provide real-time visibility and control over network traffic, enabling businesses to detect and prevent cyber attacks before they cause harm. Style is an investment factor that has a meaningful impact on investment risk and returns. Style is calculated by combining value and growth scores, which are first individually calculated.

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Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. In other words, their interests aren’t always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock’s price movement. Joel Fishbein, Truist Managing Director, joins ‘Closing Bell Overtime’ to talk Palo Alto Networks’ quarterly earnings.

We’d like to share more about how we work and what drives our day-to-day business. Its top 10 holdings account for approximately 28.16% of QTEC’s total assets under management. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same. Therefore, the Buy-equivalent ABR for Palo Alto may serve as a useful guide for investors.

While I believe that that PANW is a strong defensive play with a favorable risk profile, the investment is not risk-free. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.32% per year. These returns cover a period from January 1, 1988 through July 31, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month.

The company provides network security solutions to enterprises, service providers, and government entities. Similarly, capex intentions have fallen dramatically and while not at low levels seen in the past two recessions, businesses are still expected to spend less in the coming months. This weakened investment environment has resulted in more deferred payments from PANW customers however, impressively demand in still strong on a YoY and run-rate basis across products highlighting the resiliency of PANW’s platform. The US service sector has shown signs of weakness lately (leading indicators are more noisy than coincident). Interestingly, looking back at past recessions in the US the service sector has not seen dramatic declines in activity leading some to believe that the US service sector is “recession-proof” (or at least highly recessionary resistant). 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).

• The company now offers a suite of comprehensive cloud-based solutions.
• Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
• Founded in 2005, Palo Alto Networks has become a market leader in next-generation firewall technology and cloud-based security solutions.

The company expects total revenue to grow between 5% and 7% in the second quarter. Furthermore, Oracle anticipates second-quarter earnings per share to be between $1.27 and $1.31 versus the $1.25 estimate. On the https://1investing.in/ other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Key Earnings Data

While other software peers have displayed less profitability, the market has assigned a higher revenue multiple which indicates to me the lack of appreciation for management’s tactical shift. 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. Cortex security automation growth has been strong, reaching over 5,000 customers and average deal size growing 50% YoY. With leading market share and data access across multiple product categories (network, endpoint, cloud), PANW is well positioned to be a leader in AI-powered security (see below chart). While it’s hard to know for certain if there will be a recession, I do believe the risks are much more heavily weighted to the downside while the equity market continues to price in record earnings in 2024. I’m also skeptical that the economy will be able to sustain its strong footing in a higher rate environment with reduced credit creation.

• The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank.
• While other software peers have displayed less profitability, the market has assigned a higher revenue multiple which indicates to me the lack of appreciation for management’s tactical shift.
• In other words, at all times, this tool maintains a balance among the five ranks it assigns.
• Its top 10 holdings account for approximately 28.16% of QTEC’s total assets under management.
• 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 fact, when combining a Zacks Rank #3 or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time, while they also saw 28.3% annual returns on average, according to our 10 year backtest. Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer.