Why Medtronic PLC (MDT), Dycom Industries, Inc. (DY) and Palo Alto Networks Inc (PANW) Are 3 of Today’s Worst Stocks

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Following the lead established by the NASDAQ Composite and the S&P 500 yesterday, the Dow Jones Industrial Average moved into record-high territory today. It was hardly a firm effort from the market though. By the time the closing bell rang, the S&P 500 was at 2,202.94, up a modest 0.22%

Why Medtronic PLC (MDT), Dycom Industries, Inc. (DY) and Palo Alto Networks Inc (PANW) Are 3 of Today's Worst StocksIt could have been worse though and for owners of Dycom Industries, Inc. (NYSE:DY), Medtronic PLC (NYSE:MDT) and Palo Alto Networks Inc (NYSE:PANW), it was worse.

Here’s what went wrong for each of these names on Tuesday.

Palo Alto Networks Inc (PANW)

Cybersecurity company Palo Alto Networks failed to meet its fiscal Q1 revenue estimates, and then poured salt in the wound by warning PANW shareholders that its Q2 wouldn’t be so hot either.

All told, for the recently completed quarter, Palo Alto earned 55 cents per share (operating) on $398.1 million in revenue. The pros were only calling for a profit of 52 cents per share of PANW, but they were also expecting revenue of $400 million. The top line grew 34%, but it still wasn’t enough to distract from the fact that the current quarter’s outlook was subpar. The company anticipates booking an operating profit of between 61 and 63 cents per share of PANW, on revenue of between $426 million and $432 million. The consensus estimates were 63 cents and $439 million.

There’s another, unspoken reason PANW ended the day down 13.2% though. That is, the GAAP loss seems to be getting bigger as the top line grows. The company’s actual bottom line last quarter was a loss of $51.9 million, versus a loss of only $31.6 million in the same quarter a year earlier. Investors are concerned Palo Alto Networks could run out of money before reaching viability.

Medtronic PLC (MDT)

PANW wasn’t the only name to be up-ended by a revenue miss despite an earnings beat. Medical equipment maker Medtronic did the same, with MDT plunging 8.6% after the company’s second-quarter top line came up short.

The good news: Earnings of $1.12 per share topped the $1.11 per share analysts had predicted. The bad news: Revenue of $7.35 billion, though up 4% year-over-year, missed estimates of $7.46 billion. Medtronic also peeled back its full-year profit outlook.

CEO Omar Ishrak commented:

“Q2 revenue was disappointing and did not meet our expectations. We faced issues that affected our growth, including slower than expected revenue as we await new product introductions, particularly in CVG and Diabetes.”

Dycom Industries, Inc. (DY)

Last but not least (and like MDT and PANW), telecom infrastructure company Dycom Industries ended the day in the red as a result of a revenue miss, and in spite of an earnings beat.

For its first fiscal quarter of the year, Dycom pumped up its income to the tune of 35% to $1.67 per share; analysts were only calling for a profit of $1.65. Sales of $799.2 million were also up, by 21.2%, but that figure fell short of the anticipated $801 million.

Although the numbers were quite solid even though the top line didn’t meet estimates, DY stock fell a whopping 20.2% in response to a lackluster outlook for the quarter currently underway. Operating income is projected to roll in between 61 cents and 73 cents per share, putting pressure on the average analyst estimate of 72 cents per share of DY.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/11/medtronic-plc-mdt-dycom-industries-inc-dy-palo-alto-networks-inc-panw-3-todays-worst-stocks/.

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