Palo Alto Networks (PANW) Reaches New Lifetime High Today

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.

Trade-Ideas LLC identified Palo Alto Networks ( PANW) as a new lifetime high 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 $256.4 million.
  • PANW has traded 382,478 shares today.
  • PANW is trading at a new lifetime high.

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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 20 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 1.3 million shares per day over the past 30 days. Palo Alto has a market cap of $14.6 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.23 and a short float of 7% with 3.37 days to cover. Shares are up 43.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Palo Alto Networks as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • PANW's very impressive revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues leaped by 55.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 71.42% and other important driving factors, this stock has surged by 123.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • PALO ALTO NETWORKS INC reported significant earnings per share improvement 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 reported poor results of -$3.03 versus -$0.41 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus -$3.03).
  • 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 debt-to-equity ratio of 1.06 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, PANW's quick ratio is somewhat strong at 1.03, demonstrating the ability to handle short-term liquidity needs.

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