Trade-Ideas: Palo Alto Networks (PANW) Is Today's Post-Market Leader Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Palo Alto Networks as such a stock due to the following factors:
- PANW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $185.1 million.
- PANW is up 2.7% today from today's close.
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More details on PANW:
Palo Alto Networks, Inc. provides enterprise security platform to enterprises, service providers, and government entities worldwide. Currently there are 19 analysts that rate Palo Alto Networks a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Palo Alto Networks has been 1.1 million shares per day over the past 30 days. Palo Alto has a market cap of $11.5 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.19 and a short float of 5.1% with 2.92 days to cover. Shares are up 16% year-to-date as of the close of trading on Friday.
Analysis:
rates Palo Alto Networks as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- PANW's very impressive revenue growth greatly exceeded the industry average of 0.5%. Since the same quarter one year prior, revenues leaped by 50.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, PANW's share price has jumped by 88.07%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- PANW's debt-to-equity ratio of 0.96 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. Despite the fact that PANW's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.46 is high and demonstrates strong liquidity.
- 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 282.5% when compared to the same quarter one year ago, falling from -$7.86 million to -$30.07 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness 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.
- You can view the full Palo Alto Networks Ratings Report.
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