PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
NASDAQ:PANW - Nasdaq - US6974351057 - Common Stock
PANW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 285 industry peers in the Software industry. PANW has only an average score on both its financial health and profitability. PANW shows excellent growth, but is valued quite expensive already. 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.
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
PANW has a better Return On Assets (13.42%) than 89.96% of its industry peers.
PANW's Return On Equity of 46.25% is amongst the best of the industry. PANW outperforms 96.06% of its industry peers.
With a decent Return On Invested Capital value of 6.00%, PANW is doing good in the industry, outperforming 78.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 46.25% | ||
| ROIC | 6% |
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
The Profit Margin of PANW (32.99%) is better than 93.91% of its industry peers.
PANW's Operating Margin of 12.10% is amongst the best of the industry. PANW outperforms 80.65% of its industry peers.
PANW has a better Gross Margin (74.17%) than 63.80% of its industry peers.
PANW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.1% | ||
| PM (TTM) | 32.99% | ||
| GM | 74.17% |
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.
The number of shares outstanding for PANW has been increased compared to 5 years ago.
The debt/assets ratio for PANW has been reduced compared to a year ago.
2.2 Solvency
PANW has an Altman-Z score of 5.44. This indicates that PANW is financially healthy and has little risk of bankruptcy at the moment.
PANW's Altman-Z score of 5.44 is fine compared to the rest of the industry. PANW outperforms 64.87% 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 | 0.21 | ||
| Altman-Z | 5.44 |
ROIC/WACC0.54
WACC11.11%
2.3 Liquidity
PANW has a Current Ratio of 0.84. This is a bad value and indicates that PANW is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.84, PANW is doing worse than 80.29% of the companies in the same industry.
PANW has a Quick Ratio of 0.84. 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 (0.84) is worse than 79.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 |
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.
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 15.00%.
Measured over the past years, PANW shows a very strong growth in Revenue. The Revenue has been growing by 22.59% on average per year.
EPS 1Y (TTM)17.71%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%13.04%
Revenue 1Y (TTM)15%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%13.88%
3.2 Future
The Earnings Per Share is expected to grow by 22.98% on average over the next years. This is a very strong growth
Based on estimates for the next years, PANW will show a quite strong growth in Revenue. The Revenue will grow by 16.75% on average per year.
EPS Next Y14.16%
EPS Next 2Y14.32%
EPS Next 3Y14.83%
EPS Next 5Y22.98%
Revenue Next Year14.37%
Revenue Next 2Y14.9%
Revenue Next 3Y15.03%
Revenue Next 5Y16.75%
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 60.45 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 27.94, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 47.80, PANW can be considered very expensive at the moment.
PANW's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.11, PANW is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.45 | ||
| Fwd PE | 47.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PANW indicates a somewhat cheap valuation: PANW is cheaper than 61.29% of the companies listed in the same industry.
PANW's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PANW is cheaper than 71.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.77 | ||
| EV/EBITDA | 86.07 |
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.
PANW's earnings are expected to grow with 14.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.27
PEG (5Y)2.37
EPS Next 2Y14.32%
EPS Next 3Y14.83%
5. Dividend
5.1 Amount
No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
PALO ALTO NETWORKS INC
NASDAQ:PANW (1/17/2025, 8:19:53 PM)
Premarket: 179 +1.89 (+1.07%)177.11
-0.06 (-0.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.58%
Inst Owner Change1.41%
Ins Owners0.88%
Ins Owner Change10.03%
Market Cap116.22B
Analysts79.67
Price Target211.04 (19.16%)
Short Float %N/A
Short Ratio6.88
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)4.16%
Min EPS beat(2)3.28%
Max EPS beat(2)5.04%
EPS beat(4)4
Avg EPS beat(4)5.51%
Min EPS beat(4)3.28%
Max EPS beat(4)10.16%
EPS beat(8)8
Avg EPS beat(8)12.02%
EPS beat(12)12
Avg EPS beat(12)10.48%
EPS beat(16)16
Avg EPS beat(16)9.32%
Revenue beat(2)0
Avg Revenue beat(2)-0.91%
Min Revenue beat(2)-1.12%
Max Revenue beat(2)-0.7%
Revenue beat(4)0
Avg Revenue beat(4)-1.15%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-1.24%
Revenue beat(12)2
Avg Revenue beat(12)-0.96%
Revenue beat(16)5
Avg Revenue beat(16)-0.44%
PT rev (1m)-49.83%
PT rev (3m)-45.63%
EPS NQ rev (1m)-49.96%
EPS NQ rev (3m)-48.71%
EPS NY rev (1m)0.08%
EPS NY rev (3m)-49.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.88%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.45 | ||
| Fwd PE | 47.8 | ||
| P/S | 14.02 | ||
| P/FCF | 37.77 | ||
| P/OCF | 35.86 | ||
| P/B | 19.66 | ||
| P/tB | 110.54 | ||
| EV/EBITDA | 86.07 |
EPS(TTM)2.93
EY1.65%
EPS(NY)3.71
Fwd EY2.09%
FCF(TTM)4.69
FCFY2.65%
OCF(TTM)4.94
OCFY2.79%
SpS12.63
BVpS9.01
TBVpS1.6
PEG (NY)4.27
PEG (5Y)2.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 46.25% | ||
| ROCE | 7.73% | ||
| ROIC | 6% | ||
| ROICexc | 8.13% | ||
| ROICexgc | 16.49% | ||
| OM | 12.1% | ||
| PM (TTM) | 32.99% | ||
| GM | 74.17% | ||
| FCFM | 37.13% |
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-Score7
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.21 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 54.18% | ||
| Cap/Sales | 1.98% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 248.27% | ||
| Profit Quality | 112.55% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 5.44 |
F-Score7
WACC11.11%
ROIC/WACC0.54
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)17.71%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%13.04%
EPS Next Y14.16%
EPS Next 2Y14.32%
EPS Next 3Y14.83%
EPS Next 5Y22.98%
Revenue 1Y (TTM)15%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%13.88%
Revenue Next Year14.37%
Revenue Next 2Y14.9%
Revenue Next 3Y15.03%
Revenue Next 5Y16.75%
EBIT growth 1Y70.71%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year30.17%
EBIT Next 3Y20.76%
EBIT Next 5YN/A
FCF growth 1Y26.39%
FCF growth 3Y30.76%
FCF growth 5Y27.39%
OCF growth 1Y23.12%
OCF growth 3Y29.41%
OCF growth 5Y25.28%