PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
NASDAQ:PANW - Nasdaq - US6974351057 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to PANW. PANW was compared to 285 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. With these ratings, PANW could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
PANW had positive earnings in the past year.
In the past year PANW had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: PANW reported negative net income in multiple years.
PANW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PANW has a better Return On Assets (5.99%) than 77.89% of its industry peers.
With an excellent Return On Equity value of 19.68%, PANW belongs to the best of the industry, outperforming 85.96% of the companies in the same industry.
PANW has a Return On Invested Capital of 6.06%. This is in the better half of the industry: PANW outperforms 77.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.99% | ||
| ROE | 19.68% | ||
| ROIC | 6.06% |
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 14.64% is fine compared to the rest of the industry. PANW outperforms 79.30% of its industry peers.
PANW has a Operating Margin of 12.20%. This is amongst the best in the industry. PANW outperforms 80.70% of its industry peers.
With a decent Gross Margin value of 73.86%, PANW is doing good in the industry, outperforming 64.56% of the companies in the same industry.
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 | 12.2% | ||
| PM (TTM) | 14.64% | ||
| GM | 73.86% |
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.
PANW has more shares outstanding than it did 5 years ago.
The debt/assets ratio for PANW has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.00 indicates that PANW is not in any danger for bankruptcy at the moment.
PANW's Altman-Z score of 5.00 is fine compared to the rest of the industry. PANW outperforms 74.04% 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 | 0.18 | ||
| Altman-Z | 5 |
ROIC/WACC0.56
WACC10.91%
2.3 Liquidity
A Current Ratio of 0.84 indicates that PANW may have some problems paying its short term obligations.
The Current ratio of PANW (0.84) is worse than 80.35% of its industry peers.
A Quick Ratio of 0.84 indicates that PANW may have some problems paying its short term obligations.
PANW has a worse Quick ratio (0.84) than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.71% over the past year.
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 13.86%.
PANW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.59% yearly.
EPS 1Y (TTM)11.71%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%10.96%
Revenue 1Y (TTM)13.86%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%14.29%
3.2 Future
Based on estimates for the next years, PANW will show a very strong growth in Earnings Per Share. The EPS will grow by 23.51% on average per year.
PANW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.53% yearly.
EPS Next Y15.83%
EPS Next 2Y14.82%
EPS Next 3Y15.32%
EPS Next 5Y23.51%
Revenue Next Year14.63%
Revenue Next 2Y14.8%
Revenue Next 3Y14.82%
Revenue Next 5Y15.53%
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
A Price/Earnings ratio of 53.17 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 27.63, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 42.82 indicates a quite expensive valuation of PANW.
PANW's Price/Forward Earnings ratio is in line with the industry average.
PANW is valuated expensively when we compare the Price/Forward Earnings ratio to 20.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.17 | ||
| Fwd PE | 42.82 |
4.2 Price Multiples
PANW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PANW is cheaper than 62.11% of the companies in the same industry.
64.91% 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 | 36.15 | ||
| EV/EBITDA | 74.8 |
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 15.32% in the coming years.
PEG (NY)3.36
PEG (5Y)2.08
EPS Next 2Y14.82%
EPS Next 3Y15.32%
5. Dividend
5.1 Amount
PANW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
160.05
-7.64 (-4.56%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners81.36%
Inst Owner Change0.54%
Ins Owners1.03%
Ins Owner Change7.87%
Market Cap105.97B
Analysts78.67
Price Target215.47 (34.63%)
Short Float %3.64%
Short Ratio4.1
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)2.72%
Min EPS beat(2)2.16%
Max EPS beat(2)3.28%
EPS beat(4)4
Avg EPS beat(4)3.51%
Min EPS beat(4)2.16%
Max EPS beat(4)5.04%
EPS beat(8)8
Avg EPS beat(8)8.24%
EPS beat(12)12
Avg EPS beat(12)10.35%
EPS beat(16)16
Avg EPS beat(16)9.08%
Revenue beat(2)0
Avg Revenue beat(2)-1.14%
Min Revenue beat(2)-1.16%
Max Revenue beat(2)-1.12%
Revenue beat(4)0
Avg Revenue beat(4)-1.01%
Min Revenue beat(4)-1.16%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-1.2%
Revenue beat(12)1
Avg Revenue beat(12)-1.13%
Revenue beat(16)4
Avg Revenue beat(16)-0.59%
PT rev (1m)-0.33%
PT rev (3m)2.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.44%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)1.46%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.17 | ||
| Fwd PE | 42.82 | ||
| P/S | 12.36 | ||
| P/FCF | 36.15 | ||
| P/OCF | 34.09 | ||
| P/B | 16.62 | ||
| P/tB | 68.23 | ||
| EV/EBITDA | 74.8 |
EPS(TTM)3.01
EY1.88%
EPS(NY)3.74
Fwd EY2.34%
FCF(TTM)4.43
FCFY2.77%
OCF(TTM)4.69
OCFY2.93%
SpS12.94
BVpS9.63
TBVpS2.35
PEG (NY)3.36
PEG (5Y)2.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.99% | ||
| ROE | 19.68% | ||
| ROCE | 7.8% | ||
| ROIC | 6.06% | ||
| ROICexc | 7.98% | ||
| ROICexgc | 15.19% | ||
| OM | 12.2% | ||
| PM (TTM) | 14.64% | ||
| GM | 73.86% | ||
| FCFM | 34.21% |
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-Score6
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.18 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 54.8% | ||
| Cap/Sales | 2.06% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 227.33% | ||
| Profit Quality | 233.7% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 5 |
F-Score6
WACC10.91%
ROIC/WACC0.56
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)11.71%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%10.96%
EPS Next Y15.83%
EPS Next 2Y14.82%
EPS Next 3Y15.32%
EPS Next 5Y23.51%
Revenue 1Y (TTM)13.86%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%14.29%
Revenue Next Year14.63%
Revenue Next 2Y14.8%
Revenue Next 3Y14.82%
Revenue Next 5Y15.53%
EBIT growth 1Y34.39%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year32.04%
EBIT Next 3Y21.18%
EBIT Next 5YN/A
FCF growth 1Y9.02%
FCF growth 3Y30.76%
FCF growth 5Y27.39%
OCF growth 1Y9.27%
OCF growth 3Y29.41%
OCF growth 5Y25.28%