180.18 USD
-2.09 (-1.15%)
180.25 USD
+0.07 (+0.04%)
PANW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 277 industry peers in the Software industry. PANW has only an average score on both its financial health and profitability. PANW is valued quite expensive, but it does show an excellent growth. These ratings would make PANW suitable for growth investing!
1. Profitability
1.1 Basic Checks
- PANW had positive earnings in the past year.
- PANW had a positive operating cash flow in the past year.
- In multiple years PANW reported negative net income over the last 5 years.
- PANW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 4.75%, PANW is in the better half of the industry, outperforming 72.20% of the companies in the same industry.
- With a decent Return On Equity value of 12.89%, PANW is doing good in the industry, outperforming 76.53% of the companies in the same industry.
- PANW has a Return On Invested Capital of 5.58%. This is in the better half of the industry: PANW outperforms 74.37% of its industry peers.
- PANW had an Average Return On Invested Capital over the past 3 years of 4.95%. This is significantly below the industry average of 10.78%.
- The 3 year average ROIC (4.95%) for PANW is below the current ROIC(5.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.75% | ||
| ROE | 12.89% | ||
| ROIC | 5.58% |
ROA(3y)6.91%
ROA(5y)2.74%
ROE(3y)29.83%
ROE(5y)-23.25%
ROIC(3y)4.95%
ROIC(5y)N/A
1.3 Margins
- PANW's Profit Margin of 11.69% is fine compared to the rest of the industry. PANW outperforms 72.20% of its industry peers.
- The Operating Margin of PANW (13.24%) is better than 79.42% of its industry peers.
- PANW has a Gross Margin of 73.47%. This is comparable to the rest of the industry: PANW outperforms 59.21% of its industry peers.
- In the last couple of years the Gross Margin of PANW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.24% | ||
| PM (TTM) | 11.69% | ||
| GM | 73.47% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.21%
GM growth 5Y0.76%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PANW is destroying value.
- Compared to 1 year ago, PANW has more shares outstanding
- PANW has more shares outstanding than it did 5 years ago.
- There is no outstanding debt for PANW. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
- An Altman-Z score of 5.87 indicates that PANW is not in any danger for bankruptcy at the moment.
- PANW has a better Altman-Z score (5.87) than 76.53% of its industry peers.
- There is no outstanding debt for PANW. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 5.87 |
ROIC/WACC0.5
WACC11.08%
2.3 Liquidity
- A Current Ratio of 0.99 indicates that PANW may have some problems paying its short term obligations.
- The Current ratio of PANW (0.99) is worse than 75.45% of its industry peers.
- PANW has a Quick Ratio of 0.99. This is a bad value and indicates that PANW is not financially healthy enough and could expect problems in meeting its short term obligations.
- PANW has a Quick ratio of 0.99. This is in the lower half of the industry: PANW underperforms 74.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 19.32% over the past year.
- PANW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 32.59% yearly.
- PANW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.30%.
- PANW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.03% yearly.
EPS 1Y (TTM)19.32%
EPS 3Y38.4%
EPS 5Y32.59%
EPS Q2Q%19.23%
Revenue 1Y (TTM)15.3%
Revenue growth 3Y18.79%
Revenue growth 5Y22.03%
Sales Q2Q%15.67%
3.2 Future
- PANW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.63% yearly.
- PANW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.08% yearly.
EPS Next Y17.92%
EPS Next 2Y15.09%
EPS Next 3Y14.77%
EPS Next 5Y15.63%
Revenue Next Year14.64%
Revenue Next 2Y13.92%
Revenue Next 3Y13.45%
Revenue Next 5Y13.08%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 51.63, PANW can be considered very expensive at the moment.
- PANW's Price/Earnings is on the same level as the industry average.
- PANW is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 40.72, the valuation of PANW can be described as expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of PANW is on the same level as its industry peers.
- PANW's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.63 | ||
| Fwd PE | 40.72 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as PANW.
- 65.70% of the companies in the same industry are more expensive than PANW, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.02 | ||
| EV/EBITDA | 75.4 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PANW does not grow enough to justify the current Price/Earnings ratio.
- PANW's earnings are expected to grow with 14.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.88
PEG (5Y)1.58
EPS Next 2Y15.09%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
- No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
PALO ALTO NETWORKS INC / PANW FAQ
What is the ChartMill fundamental rating of PALO ALTO NETWORKS INC (PANW) stock?
ChartMill assigns a fundamental rating of 5 / 10 to PANW.
What is the valuation status for PANW stock?
ChartMill assigns a valuation rating of 2 / 10 to PALO ALTO NETWORKS INC (PANW). This can be considered as Overvalued.
What is the profitability of PANW stock?
PALO ALTO NETWORKS INC (PANW) has a profitability rating of 5 / 10.
What are the PE and PB ratios of PALO ALTO NETWORKS INC (PANW) stock?
The Price/Earnings (PE) ratio for PALO ALTO NETWORKS INC (PANW) is 51.63 and the Price/Book (PB) ratio is 14.49.
What is the expected EPS growth for PALO ALTO NETWORKS INC (PANW) stock?
The Earnings per Share (EPS) of PALO ALTO NETWORKS INC (PANW) is expected to grow by 17.92% in the next year.