PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
USA - NASDAQ:PANW - US6974351057 - Common Stock
203.12 USD
+1.78 (+0.88%)
205.11 USD
+1.99 (+0.98%)
We assign a fundamental rating of 5 out of 10 to PANW. PANW was compared to 280 industry peers in the Software industry. PANW has an average financial health and profitability rating. PANW is valued quite expensively, but it does show have an excellent growth rating. 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.
The reported net income has been mixed in the past 5 years: PANW reported negative net income in multiple years.
Of the past 5 years PANW 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of PANW (5.63%) is better than 73.57% of its industry peers.
PANW's Return On Equity of 17.12% is amongst the best of the industry. PANW outperforms 84.64% of its industry peers.
The Return On Invested Capital of PANW (5.01%) is better than 73.57% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PANW is significantly below the industry average of 11.85%.
The last Return On Invested Capital (5.01%) for PANW is above the 3 year average (4.95%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROIC | 5.01% |
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
With a decent Profit Margin value of 13.95%, PANW is doing good in the industry, outperforming 77.50% of the companies in the same industry.
Looking at the Operating Margin, with a value of 11.36%, PANW is in the better half of the industry, outperforming 77.14% of the companies in the same industry.
PANW's Gross Margin of 73.56% is fine compared to the rest of the industry. PANW outperforms 61.43% of its industry peers.
PANW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.36% | ||
| PM (TTM) | 13.95% | ||
| GM | 73.56% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PANW is destroying value.
The number of shares outstanding for PANW has been increased compared to 1 year ago.
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 6.17 indicates that PANW is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 6.17, PANW is doing good in the industry, outperforming 73.93% of the companies in the same industry.
PANW has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.13 | ||
| Altman-Z | 6.17 |
ROIC/WACC0.46
WACC10.94%
2.3 Liquidity
A Current Ratio of 0.90 indicates that PANW may have some problems paying its short term obligations.
PANW's Current ratio of 0.90 is on the low side compared to the rest of the industry. PANW is outperformed by 76.79% of its industry peers.
A Quick Ratio of 0.90 indicates that PANW may have some problems paying its short term obligations.
With a Quick ratio value of 0.90, PANW is not doing good in the industry: 76.07% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.81% over the past year.
The Earnings Per Share has been growing by 32.59% on average over the past years. This is a very strong growth
Looking at the last year, PANW shows a quite strong growth in Revenue. The Revenue has grown by 14.87% in the last year.
Measured over the past years, PANW shows a very strong growth in Revenue. The Revenue has been growing by 22.03% on average per year.
EPS 1Y (TTM)17.81%
EPS 3Y38.4%
EPS 5Y32.59%
EPS Q2Q%25.83%
Revenue 1Y (TTM)14.87%
Revenue growth 3Y18.79%
Revenue growth 5Y22.03%
Sales Q2Q%15.84%
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 15.15% yearly.
The Revenue is expected to grow by 13.00% on average over the next years. This is quite good.
EPS Next Y15.49%
EPS Next 2Y14.51%
EPS Next 3Y14.35%
EPS Next 5Y15.15%
Revenue Next Year14.44%
Revenue Next 2Y13.93%
Revenue Next 3Y13.18%
Revenue Next 5Y13%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 60.81, 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 27.20, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 52.66, which means the current valuation is very expensive for PANW.
The rest of the industry has a similar Price/Forward Earnings ratio as PANW.
PANW is valuated expensively when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.81 | ||
| Fwd PE | 52.66 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PANW.
PANW's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PANW is cheaper than 62.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.28 | ||
| EV/EBITDA | 98.26 |
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 has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as PANW's earnings are expected to grow with 14.35% in the coming years.
PEG (NY)3.93
PEG (5Y)1.87
EPS Next 2Y14.51%
EPS Next 3Y14.35%
5. Dividend
5.1 Amount
No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
203.12
+1.78 (+0.88%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners81.93%
Inst Owner Change1.31%
Ins Owners0.93%
Ins Owner Change-13.19%
Market Cap135.87B
Analysts79
Price Target217 (6.83%)
Short Float %7.42%
Short Ratio5.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.01%
Min EPS beat(2)1.85%
Max EPS beat(2)2.16%
EPS beat(4)4
Avg EPS beat(4)3.09%
Min EPS beat(4)1.85%
Max EPS beat(4)5.04%
EPS beat(8)8
Avg EPS beat(8)6.54%
EPS beat(12)12
Avg EPS beat(12)10.13%
EPS beat(16)16
Avg EPS beat(16)8.85%
Revenue beat(2)0
Avg Revenue beat(2)-1.31%
Min Revenue beat(2)-1.46%
Max Revenue beat(2)-1.16%
Revenue beat(4)0
Avg Revenue beat(4)-1.11%
Min Revenue beat(4)-1.46%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-1.18%
Revenue beat(12)0
Avg Revenue beat(12)-1.27%
Revenue beat(16)4
Avg Revenue beat(16)-0.65%
PT rev (1m)1.15%
PT rev (3m)1.22%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)0.01%
EPS NY rev (1m)2.76%
EPS NY rev (3m)2.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.44%
Revenue NY rev (3m)0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.81 | ||
| Fwd PE | 52.66 | ||
| P/S | 15.31 | ||
| P/FCF | 45.28 | ||
| P/OCF | 42.35 | ||
| P/B | 18.79 | ||
| P/tB | 55.47 | ||
| EV/EBITDA | 98.26 |
EPS(TTM)3.34
EY1.64%
EPS(NY)3.86
Fwd EY1.9%
FCF(TTM)4.49
FCFY2.21%
OCF(TTM)4.8
OCFY2.36%
SpS13.27
BVpS10.81
TBVpS3.66
PEG (NY)3.93
PEG (5Y)1.87
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROCE | 7.05% | ||
| ROIC | 5.01% | ||
| ROICexc | 6.51% | ||
| ROICexgc | 11.52% | ||
| OM | 11.36% | ||
| PM (TTM) | 13.95% | ||
| GM | 73.56% | ||
| FCFM | 33.81% |
ROA(3y)6.91%
ROA(5y)2.74%
ROE(3y)29.83%
ROE(5y)-23.25%
ROIC(3y)4.95%
ROIC(5y)N/A
ROICexc(3y)6.58%
ROICexc(5y)N/A
ROICexgc(3y)15.61%
ROICexgc(5y)N/A
ROCE(3y)6.97%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.21%
GM growth 5Y0.76%
F-Score6
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.13 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 61.75% | ||
| Cap/Sales | 2.34% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 238.74% | ||
| Profit Quality | 242.41% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 6.17 |
F-Score6
WACC10.94%
ROIC/WACC0.46
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)17.81%
EPS 3Y38.4%
EPS 5Y32.59%
EPS Q2Q%25.83%
EPS Next Y15.49%
EPS Next 2Y14.51%
EPS Next 3Y14.35%
EPS Next 5Y15.15%
Revenue 1Y (TTM)14.87%
Revenue growth 3Y18.79%
Revenue growth 5Y22.03%
Sales Q2Q%15.84%
Revenue Next Year14.44%
Revenue Next 2Y13.93%
Revenue Next 3Y13.18%
Revenue Next 5Y13%
EBIT growth 1Y14.61%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year25.95%
EBIT Next 3Y17.98%
EBIT Next 5YN/A
FCF growth 1Y-0.39%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y1.55%
OCF growth 3YN/A
OCF growth 5YN/A