Palo Alto Networks (PANW) Stock Rises Ahead of Monday's Earnings Release
NEW YORK (TheStreet) -- Shares of Palo Alto Networks (PANW) - Get Report closed trading up by 2.27% to $167.39 on Thursday, ahead of the release of the company's fiscal 2016 first quarter earnings results, due out on Monday.
The Santa Clara-based Internet security company is expected to report first quarter earnings of 32 cents per share on revenue of $284.19 million.
Analysts' earnings expectations are in line with the company's own 31 cents to 32 cents per share guidance.
Those totals are ahead of the 28 cents per share on revenue of $283.9 million the company reported for the same quarter the previous year.
Separately, TheStreet Ratings team rates PALO ALTO NETWORKS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate PALO ALTO NETWORKS INC (PANW) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 43.4% when compared to the same quarter one year ago, falling from -$32.06 million to -$45.97 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, PALO ALTO NETWORKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for PALO ALTO NETWORKS INC is currently very high, coming in at 76.85%. Regardless of PANW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PANW's net profit margin of -16.19% significantly underperformed when compared to the industry average.
- PANW's debt-to-equity ratio of 1.00 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.97 is weak.
- PALO ALTO NETWORKS INC's earnings per share declined by 34.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PALO ALTO NETWORKS INC continued to lose money by earning -$2.02 versus -$3.03 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus -$2.02).
- You can view the full analysis from the report here: PANW
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.