What Does Palo Alto Networks, Inc.'s (NASDAQ:PANW) Share Price Indicate?

Let's talk about the popular Palo Alto Networks, Inc. (NASDAQ:PANW). The company's shares saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Palo Alto Networks’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Palo Alto Networks

Is Palo Alto Networks Still Cheap?

Great news for investors – Palo Alto Networks is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $412.91, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Palo Alto Networks’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Palo Alto Networks generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Palo Alto Networks' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since PANW is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on PANW for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PANW. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

So while earnings quality is important, it's equally important to consider the risks facing Palo Alto Networks at this point in time. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Palo Alto Networks.

If you are no longer interested in Palo Alto Networks, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.