PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
NASDAQ:PANW - Nasdaq - US6974351057 - Common Stock - Currency: USD
Overall PANW gets a fundamental rating of 5 out of 10. We evaluated PANW against 282 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 could make PANW a good candidate 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.
In the past 5 years PANW always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 5.63%, PANW is doing good in the industry, outperforming 76.60% of the companies in the same industry.
Looking at the Return On Equity, with a value of 17.12%, PANW belongs to the top of the industry, outperforming 84.75% of the companies in the same industry.
PANW has a Return On Invested Capital of 5.89%. This is in the better half of the industry: PANW outperforms 76.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROIC | 5.89% |
ROA(3y)4.58%
ROA(5y)1.19%
ROE(3y)-17.38%
ROE(5y)-31%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
PANW's Profit Margin of 13.95% is amongst the best of the industry. PANW outperforms 81.21% of its industry peers.
PANW has a Operating Margin of 12.21%. This is in the better half of the industry: PANW outperforms 78.37% of its industry peers.
The Gross Margin of PANW (73.56%) is better than 61.70% of its industry peers.
PANW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.21% | ||
| 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 3Y2.01%
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.
The number of shares outstanding for PANW has been increased compared to 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 6.10 indicates that PANW is not in any danger for bankruptcy at the moment.
PANW's Altman-Z score of 6.10 is fine compared to the rest of the industry. PANW outperforms 73.76% 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 | 0.13 | ||
| Altman-Z | 6.1 |
ROIC/WACC0.67
WACC8.84%
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 77.66% of its industry peers.
PANW has a Quick Ratio of 0.90. This is a bad value and indicates that PANW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of PANW (0.90) is worse than 77.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
PANW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.32%, which is quite good.
PANW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.52% yearly.
PANW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.91%.
PANW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.59% yearly.
EPS 1Y (TTM)12.32%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%21.21%
Revenue 1Y (TTM)13.91%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%15.33%
3.2 Future
PANW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.92% yearly.
PANW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.14% yearly.
EPS Next Y17.8%
EPS Next 2Y15.08%
EPS Next 3Y15.12%
EPS Next 5Y22.92%
Revenue Next Year14.83%
Revenue Next 2Y14.48%
Revenue Next 3Y14.39%
Revenue Next 5Y15.14%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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 64.97, PANW can be considered very expensive at the moment.
PANW's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 27.15. PANW is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 54.51, which means the current valuation is very expensive for 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's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.97 | ||
| Fwd PE | 54.51 |
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 64.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.48 | ||
| EV/EBITDA | 91.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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 15.12% in the coming years.
PEG (NY)3.65
PEG (5Y)2.55
EPS Next 2Y15.08%
EPS Next 3Y15.12%
5. Dividend
5.1 Amount
PANW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
204.64
+4.07 (+2.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners81.75%
Inst Owner Change3.7%
Ins Owners0.96%
Ins Owner Change-7.97%
Market Cap136.45B
Analysts78.03
Price Target214.23 (4.69%)
Short Float %4.08%
Short Ratio4.92
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)0.63%
PT rev (3m)-0.91%
EPS NQ rev (1m)0.27%
EPS NQ rev (3m)2.06%
EPS NY rev (1m)1.73%
EPS NY rev (3m)1.53%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.12%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.97 | ||
| Fwd PE | 54.51 | ||
| P/S | 15.38 | ||
| P/FCF | 45.48 | ||
| P/OCF | 42.54 | ||
| P/B | 18.87 | ||
| P/tB | 55.71 | ||
| EV/EBITDA | 91.52 |
EPS(TTM)3.15
EY1.54%
EPS(NY)3.75
Fwd EY1.83%
FCF(TTM)4.5
FCFY2.2%
OCF(TTM)4.81
OCFY2.35%
SpS13.31
BVpS10.84
TBVpS3.67
PEG (NY)3.65
PEG (5Y)2.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROCE | 7.58% | ||
| ROIC | 5.89% | ||
| ROICexc | 7.65% | ||
| ROICexgc | 13.54% | ||
| OM | 12.21% | ||
| PM (TTM) | 13.95% | ||
| GM | 73.56% | ||
| FCFM | 33.81% |
ROA(3y)4.58%
ROA(5y)1.19%
ROE(3y)-17.38%
ROE(5y)-31%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
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 3Y2.01%
GM growth 5Y0.61%
F-Score5
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 | 226% | ||
| Profit Quality | 242.41% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 6.1 |
F-Score5
WACC8.84%
ROIC/WACC0.67
Cap/Depr(3y)58.47%
Cap/Depr(5y)64.8%
Cap/Sales(3y)2.53%
Cap/Sales(5y)3.32%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.32%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%21.21%
EPS Next Y17.8%
EPS Next 2Y15.08%
EPS Next 3Y15.12%
EPS Next 5Y22.92%
Revenue 1Y (TTM)13.91%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%15.33%
Revenue Next Year14.83%
Revenue Next 2Y14.48%
Revenue Next 3Y14.39%
Revenue Next 5Y15.14%
EBIT growth 1Y23.22%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year32.09%
EBIT Next 3Y20.86%
EBIT Next 5YN/A
FCF growth 1Y9.56%
FCF growth 3Y30.76%
FCF growth 5Y27.39%
OCF growth 1Y11.11%
OCF growth 3Y29.41%
OCF growth 5Y25.28%