Palo Alto Networks, whose cybersecurity products are ubiquitous in the corporate market, got a key rating improvement Wednesday, as its IBD SmartSelect Composite Rating rose from 94 the day before to a near-best 96.
The rating upgrade means Palo Alto stock is now outpacing 96% of all other stocks in terms of key performance metrics and technical strength. The best growth stocks often have a 90 or higher Composite Rating.
Palo Alto Among Top 3% For Profit Growth
Palo Alto also sports a 97 EPS Rating, meaning its recent quarterly and longer-term annual earnings growth tops 97% of all stocks. It carries a best-possible A SMR Rating (sales + profit margins + return on equity) reflecting its strong fundamentals.
Learn How — And When — To Sell Stocks
Its Accumulation/Distribution Rating of D shows moderate selling by institutional investors over the last 13 weeks. Look for the rating to improve to at least a C or better.
Santa Clara, Calif.-based Palo Alto Networks went public in July 2012, and traded at 9.52 shortly after its IPO. It's grown almost continually since then.
The company says on its website that it has 70,000 customers and 95% of the Fortune 100 companies use Palo Alto Networks security software. In February the company rolled out its latest product, Cortex Cloud, a cloud-based artificial intelligence infused cybersecurity platform.
On Feb. 19, Palo Alto stock rose to an all-time high 208.39. From there it pulled back in sync with the market correction. Like some other industry leaders it's shown a bit of renewed strength this week, rising from a 165.88 low on Monday to 173 Wednesday afternoon, up 0.8% for the day and about 1,717% in the last 12-plus years.
Earnings Growth Ranged Up to 126% In 2024
In Q2, the company posted 11% EPS growth to 81 cents per share on a 14% gain in sales to $2.26 billion. Revenue has grown at a double-digit clip this past year ranging from 12% to 15%, while EPS growth vacillated from 6% to 126%.
Palo Alto Networks CEO Nikesh Arora said in the Q2 earnings release that, "Our growth across regions and demand for our platforms demonstrate our customers' confidence in our approach. It reaffirms our faith in our 2030 plans and our $15 billion NGS (next generation security) ARR (annual recurring revenue) goal."
Palo Alto Networks earns the No. 5 rank among its peers in the 34-stock Computer Software-Security industry group. Fortinet is the No. 1-ranked stock in the group. Zscaler, Okta and CrowdStrike are also among the top five in the group.
This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.
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