Monday afternoon Palo Alto stock zoomed as much as 10% higher and the network security software maker was on track for its third higher close in a row.
The cybersecurity firm took a hit last Wednesday when its earnings report disappointed the Street. Investors can be forgiving though when a company has a good-looking track record. On Monday its stock was soaring and Palo Alto stock got a Relative Strength (RS) Rating upgrade from 80 to 85, putting it in an elite group of the best stocks to buy and watch.
Palo Alto Stock In Top 15%
The upgraded 85 RS Rating means Palo Alto stock is in the top 15% of stocks for price performance. Decades of market research shows that the best stocks typically have an RS Rating north of 80 as they begin their biggest runs.
Santa Clara, Calif.-based Palo Alto Networks reported 39% earnings growth last quarter to $1.46 per share, which is strong although it's down from prior quarters. The prior three stanzas Palo Alto reported 83%, 80% and 66% EPS growth. Sales grew 19% last quarter to $1.98 billion. Revenue grew 24%, 26% and 20% quarterly before that.
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These Ratings Glow
Among its other ratings Palo Alto stock has a terrific 98 out of 99 for both Composite Rating and its Earnings Per Share Rating. It also sports an A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale, reflecting strong fundamentals.
Finally, it has an A- Accumulation/Distribution Rating, pointing to strong buying by mutual funds, insurance funds and the like.
The IBD Big Cap 20 stock is now considered extended and out of buy range after clearing a 265.90 buy point in a second-stage flat base. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week moving average.
Palo Alto Stock earns the No. 4 rank among its peers in the 34-stock Computer Software-Security industry group. CyberArk Software and Zscaler are also among the group's highest-rated stocks.
IBD's proprietary Relative Strength Rating measures technical performance by showing how a stock's price movement over the last 52 weeks compares to that of other stocks on the major indexes.
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