180.18 USD
-2.09 (-1.15%)
180.25 USD
+0.07 (+0.04%)
We assign a fundamental rating of 5 out of 10 to PANW. PANW was compared to 278 industry peers in the Software industry. Both the profitability and the financial health of PANW get a neutral evaluation. Nothing too spectacular is happening here. 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
- In the past year PANW was profitable.
- 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.
- In the past 5 years PANW always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 4.75%, PANW is in the better half of the industry, outperforming 72.30% of the companies in the same industry.
- The Return On Equity of PANW (12.89%) is better than 76.62% of its industry peers.
- PANW has a better Return On Invested Capital (5.58%) than 74.10% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for PANW is significantly below the industry average of 10.74%.
- The last Return On Invested Capital (5.58%) for PANW is above the 3 year average (4.95%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.75% | ||
| ROE | 12.89% | ||
| ROIC | 5.58% |
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
- PANW has a better Profit Margin (11.69%) than 72.30% of its industry peers.
- Looking at the Operating Margin, with a value of 13.24%, PANW is in the better half of the industry, outperforming 79.14% of the companies in the same industry.
- PANW has a Gross Margin (73.47%) which is comparable to the rest of the 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 | 13.24% | ||
| PM (TTM) | 11.69% | ||
| GM | 73.47% |
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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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 5.81 indicates that PANW is not in any danger for bankruptcy at the moment.
- PANW has a Altman-Z score of 5.81. This is in the better half of the industry: PANW outperforms 76.62% 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 | ||
| Altman-Z | 5.81 |
ROIC/WACC0.5
WACC11.08%
2.3 Liquidity
- PANW has a Current Ratio of 0.99. This is a bad value and indicates that PANW is not financially healthy enough and could expect problems in meeting its short term obligations.
- PANW's Current ratio of 0.99 is on the low side compared to the rest of the industry. PANW is outperformed by 75.54% of its industry peers.
- A Quick Ratio of 0.99 indicates that PANW may have some problems paying its short term obligations.
- PANW's Quick ratio of 0.99 is on the low side compared to the rest of the industry. PANW is outperformed by 74.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
- PANW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.32%, which is quite good.
- 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 15.30% in the last year.
- The Revenue has been growing by 22.03% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)19.32%
EPS 3Y38.4%
EPS 5Y32.59%
EPS Q2Q%19.23%
Revenue 1Y (TTM)15.3%
Revenue growth 3Y18.79%
Revenue growth 5Y22.03%
Sales Q2Q%15.67%
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 15.63% yearly.
- Based on estimates for the next years, PANW will show a quite strong growth in Revenue. The Revenue will grow by 13.08% on average per year.
EPS Next Y17.91%
EPS Next 2Y15.09%
EPS Next 3Y14.77%
EPS Next 5Y15.63%
Revenue Next Year14.64%
Revenue Next 2Y13.92%
Revenue Next 3Y13.45%
Revenue Next 5Y13.08%
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.
- 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 51.63 indicates a quite expensive valuation of PANW.
- PANW's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.21. PANW is valued rather expensively when compared to this.
- Based on the Price/Forward Earnings ratio of 40.73, the valuation of PANW can be described as expensive.
- 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 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.63 | ||
| Fwd PE | 40.73 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as PANW.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of PANW indicates a somewhat cheap valuation: PANW is cheaper than 65.83% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.02 | ||
| EV/EBITDA | 74.5 |
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's earnings are expected to grow with 14.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.88
PEG (5Y)1.58
EPS Next 2Y15.09%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
- No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
PALO ALTO NETWORKS INC / PANW FAQ
What is the ChartMill fundamental rating of PALO ALTO NETWORKS INC (PANW) stock?
ChartMill assigns a fundamental rating of 5 / 10 to PANW.
What is the valuation status for PANW stock?
ChartMill assigns a valuation rating of 2 / 10 to PALO ALTO NETWORKS INC (PANW). This can be considered as Overvalued.
What is the profitability of PANW stock?
PALO ALTO NETWORKS INC (PANW) has a profitability rating of 5 / 10.
What are the PE and PB ratios of PALO ALTO NETWORKS INC (PANW) stock?
The Price/Earnings (PE) ratio for PALO ALTO NETWORKS INC (PANW) is 51.63 and the Price/Book (PB) ratio is 14.49.
What is the expected EPS growth for PALO ALTO NETWORKS INC (PANW) stock?
The Earnings per Share (EPS) of PALO ALTO NETWORKS INC (PANW) is expected to grow by 17.91% in the next year.