Is It Time to Consider Buying Palo Alto Networks, Inc. (NASDAQ:PANW)?

Palo Alto Networks, Inc. (NASDAQ:PANW) has seen its stock price increase by over 10% over the past two months on the NASDAQGS. Shareholders may appreciate the recent price rally, but the company still has a ways to go before it hits its yearly highs again. With many analysts covering the large-cap stock, we can expect that any price-sensitive announcements have already been factored into the stock price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Palo Alto Networks’ outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Palo Alto Networks

Is Palo Alto Networks still cheap?

The stock appears to be fairly well valued at the moment according to our valuation model. It is trading about 9.06% above our intrinsic value, which means that if you buy Palo Alto Networks today, you will be paying a relatively reasonable price. And if you believe the stock is truly worth $296.98, there is only a negligible downside when the price falls back to its true value. Is there another opportunity to buy low in the future? Given that Palo Alto Networks’ stock price is quite volatile, we could potentially see it move lower (or higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator of how much the stock will move relative to the rest of the market.

Can we expect growth from Palo Alto Networks?

Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. While value investors argue that it’s the intrinsic value relative to the price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. However, in the case of Palo Alto Networks, the company is expected to post very negative earnings growth over the next few years, which doesn’t help strengthen its investment thesis. It seems that the risk of future uncertainty is high, at least in the short term.

What this means for you

Are you a shareholder? PANW’s stock price seems reasonable right now, but given the uncertainty of negative returns in the future, this could be a good time to reduce risk in your portfolio. Is your current exposure to the stock optimal for your overall portfolio? And is the opportunity cost of holding a stock with a negative outlook too high? Before making a decision on the stock, check whether its fundamentals have changed.

Are you a potential investor? If you have been watching PANW for a while, now may not be the most advantageous time to buy, given that the stock is trading around its fair value. The price appears to be trading at its fair value, which means there is less upside to be gained from a mispricing. Additionally, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors that we have not considered today that can help shape your opinion on PANW if the price fluctuates below its true value.

Keep in mind that when it comes to analyzing a stock, it is worth noting the risks involved. Our analysis shows 3 Warning Signs for Palo Alto Networks (1 doesn’t really suit us!) and we strongly recommend that you consult them before investing.

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

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

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