PALO ALTO NETWORKS INC (NASDAQ:PANW) - A Strong Growth Stock with Technical Breakout Potential

PALO ALTO NETWORKS INC (NASDAQ:PANW) was identified by our screener as a strong growth stock with a favorable technical setup. The company combines solid growth fundamentals with a promising chart pattern, making it worth a closer look.

Growth Fundamentals

• Revenue & Earnings Growth: PANW has demonstrated strong revenue growth, increasing by 13.86% over the past year and averaging 22.59% annually over the last five years. Earnings per share (EPS) have also grown at a robust rate of 25.52% per year.
• Future Expectations: Analysts project continued growth, with EPS expected to rise by 23.51% and revenue by 15.53% annually in the coming years.
• Profitability: The company maintains healthy margins, with a gross margin of 73.86% and an operating margin of 12.20%, outperforming many peers in the software industry.

Financial Health & Valuation

• Financial Health: PANW scores moderately on financial health, with no debt but weaker liquidity metrics, including a current ratio of 0.84.
• Valuation: The stock trades at a high P/E ratio of 63.42, reflecting its growth premium. While expensive compared to the broader market, it remains in line with industry peers.

Technical Setup

• Trend Strength: Both short-term and long-term trends are positive, with the stock trading near the upper end of its 52-week range.
• Support & Resistance: Key support levels are found around $186.92-$189.08, while resistance sits near $192.69 and $202.95. A breakout above resistance could signal further upside.
• Consolidation: Recent price action shows reduced volatility, suggesting a potential breakout if momentum continues.

Our Strong Growth Stocks with Good Technical Setup Ratings screener lists more stocks with similar characteristics.
For a deeper dive, review the full fundamental analysis of PANW or its technical analysis report.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.