Over the past month or so, shares of Palo Alto Networks (PANW) had fallen more than 15%. Analysts and investors alike sent the stock into a downward spiral, overreacting after the company scheduled its earnings call for a Friday.
There is no question that this is a rare occurrence, but investor sentiment can be a fickle beast. All it takes is a few talking heads to raise their concerns and start throwing out theories as to what could be wrong before the alarm gets sounded.
Despite the company insisting that slating the earnings call for a Friday was nothing more than a scheduling thing for busy executives, there was fear that something negative was coming. Something that the company wanted to try and sneak out before the weekend.
Instead, though, the company reported results that exceeded analysts’ expectations. EPS came in at $1.44/share compared to the expected $1.28/share. Revenue fell just shy of the expected $1.96 billion expected for the quarter with a reported $1.95 billion.
Looking ahead, Palo Alto Networks is projecting billings for the full year of $10.9b to $11b, coming in above the $10.77b Wall Street is looking for. In the longer term, the company is projecting sales growth of 20% over the next three years.
There’s a good chance that the company knew exactly what would happen as a result of scheduling a Friday earnings call and played the market like a fiddle. It doesn’t take much to set analysts off their rockers, and scheduling a late Friday summer earnings call was more than enough to draw attention to the company.
In fact, CEO Nikesh Arora said that the attendance on the call was more than that of the last 6 earnings calls combined. Arora started off the call with an apology for the concern and admitted they’d enjoyed the attention and reading the rumors leading into the call.
As a result of all this news, shares of PANW shot up more than 15% in Monday morning’s trading session. Many analysts ended up raising their price target and reiterating “buy” ratings for the stock.
So, what does that mean for you as an investor? Does PANW belong in your portfolio, or is now not the right time to buy? We’ve analyzed PANW through the VectorVest stock forecasting software and uncovered 3 things you need to see before you make a move one way or the other.
Despite Scaring Analysts Friday Earnings, PANW Has Excellent Upside Potential, Very Good Safety, & Good Timing
The VectorVest system helps you tune out the noise and simplify your trading strategy by giving you clear, actionable insights in just 3 ratings. These are relative value (RV), relative safety (RS), and relative timing (RT).
Each rating sits on its own scale of 0.00-2.00 with 1.00 being the average. Based on the overall VST rating for a stock, the system issues a clear buy, sell, or hold recommendation - no more guesswork, no more emotion clouding your judgment. That being said, here’s what we found for PANW:
- Excellent Upside Potential: The RV rating compares a stock’s long-term price appreciation potential to AAA corporate bond rates and risk. And right now, PANW has an excellent RV Rating of 1.41.
- Very Good Safety: The RS rating is an indicator of risk. It’s derived through a calculation of the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity. As for PANW, the RS rating of 1.29 is very good.
- Good Timing: After recovering the losses that were mounting over the last month, PANW is rallying back in the right direction. The RT rating of 1.17 is considered good and is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 1.28 is very good for PANW. Does that mean it’s time to buy this stock? A clear answer is just a click away at VectorVest. Get your free stock analysis today - you’re not going to want to miss this opportunity with PANW.
Want These Types of Insights at Your Fingertips so You Can Win More Trades?
Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.
VectorVest advocates buying safe, undervalued stocks, rising in price. Despite the concern over the company’s bizarre Friday earnings release, PANW has excellent upside potential, very good safety, and good timing.
Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!