PALO ALTO NETWORKS INC (PANW)
US6974351057 - Common Stock
We assign a fundamental rating of 5 out of 10 to PANW. PANW was compared to 279 industry peers in the Software industry. PANW has an average financial health and profitability rating. PANW shows excellent growth, but is valued quite expensive already. This makes PANW very considerable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year PANW was profitable.
In the past year PANW had a positive cash flow from operations.
In multiple years PANW reported negative net income over the last 5 years.
Each year in the past 5 years PANW had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 12.89%, PANW belongs to the best of the industry, outperforming 91.76% of the companies in the same industry.
Looking at the Return On Equity, with a value of 49.86%, PANW belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
PANW has a Return On Invested Capital of 5.60%. This is in the better half of the industry: PANW outperforms 76.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.89% | ||
| ROE | 49.86% | ||
| ROIC | 5.6% |
ROA(3y)4.58%
ROA(5y)1.19%
ROE(3y)-17.38%
ROE(5y)-30.98%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
PANW's Profit Margin of 32.11% is amongst the best of the industry. PANW outperforms 94.98% of its industry peers.
PANW has a Operating Margin of 11.07%. This is in the better half of the industry: PANW outperforms 79.57% of its industry peers.
PANW has a better Gross Margin (74.35%) than 63.80% 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 | 11.07% | ||
| PM (TTM) | 32.11% | ||
| GM | 74.35% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.01%
GM growth 5Y0.61%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PANW is destroying value.
PANW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PANW has more shares outstanding
Compared to 1 year ago, PANW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.80 indicates that PANW is not in any danger for bankruptcy at the moment.
PANW's Altman-Z score of 5.80 is fine compared to the rest of the industry. PANW outperforms 65.95% of its industry peers.
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 | 0.31 | ||
| Altman-Z | 5.8 |
ROIC/WACC0.47
WACC11.83%
2.3 Liquidity
PANW has a Current Ratio of 0.89. This is a bad value and indicates that PANW is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.89, PANW is not doing good in the industry: 78.49% of the companies in the same industry are doing better.
A Quick Ratio of 0.89 indicates that PANW may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.89, PANW is doing worse than 78.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
PANW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.71%, which is quite good.
Measured over the past years, PANW shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.52% on average per year.
PANW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.46%.
The Revenue has been growing by 22.59% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)17.71%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%13.04%
Revenue 1Y (TTM)16.46%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%13.88%
3.2 Future
PANW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.86% yearly.
Based on estimates for the next years, PANW will show a quite strong growth in Revenue. The Revenue will grow by 17.44% on average per year.
EPS Next Y12.84%
EPS Next 2Y13.82%
EPS Next 3Y15.55%
EPS Next 5Y22.86%
Revenue Next Year14.1%
Revenue Next 2Y14.66%
Revenue Next 3Y15.2%
Revenue Next 5Y17.44%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last 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
A Price/Earnings ratio of 67.98 indicates a quite expensive valuation of PANW.
Compared to the rest of the industry, the Price/Earnings ratio of PANW is on the same level as its industry peers.
PANW is valuated expensively when we compare the Price/Earnings ratio to 28.96, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 54.15 indicates a quite expensive valuation of PANW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PANW is on the same level as its industry peers.
PANW is valuated expensively when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 67.98 | ||
| Fwd PE | 54.15 |
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 67.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.97 | ||
| EV/EBITDA | 107.47 |
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.
The decent profitability rating of PANW may justify a higher PE ratio.
A more expensive valuation may be justified as PANW's earnings are expected to grow with 15.55% in the coming years.
PEG (NY)5.29
PEG (5Y)2.66
EPS Next 2Y13.82%
EPS Next 3Y15.55%
5. Dividend
5.1 Amount
No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
PALO ALTO NETWORKS INC
NASDAQ:PANW (11/21/2024, 7:35:56 PM)
After market: 397.03 -0.67 (-0.17%)397.7
+4.81 (+1.22%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap130.15B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 67.98 | ||
| Fwd PE | 54.15 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)5.29
PEG (5Y)2.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.89% | ||
| ROE | 49.86% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.07% | ||
| PM (TTM) | 32.11% | ||
| GM | 74.35% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)17.71%
EPS 3Y40.37%
EPS 5Y
EPS Q2Q%
EPS Next Y12.84%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)16.46%
Revenue growth 3Y23.55%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y