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 284 industry peers in the Software industry. PANW has an average financial health and profitability rating. PANW is valued quite expensive, but it does show an excellent growth. These ratings would make PANW suitable 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.
Each year in the past 5 years PANW had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.99%, PANW is in the better half of the industry, outperforming 78.62% of the companies in the same industry.
Looking at the Return On Equity, with a value of 19.68%, PANW belongs to the top of the industry, outperforming 87.32% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.06%, PANW is in the better half of the industry, outperforming 77.54% of the companies in the same industry.
| 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
With an excellent Profit Margin value of 14.64%, PANW belongs to the best of the industry, outperforming 81.52% of the companies in the same industry.
PANW has a Operating Margin of 12.20%. This is amongst the best in the industry. PANW outperforms 80.80% of its industry peers.
PANW has a better Gross Margin (73.86%) than 62.68% 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 | 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
PANW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, PANW has more shares outstanding
The number of shares outstanding for PANW has been increased compared to 5 years ago.
PANW has a better debt/assets ratio than last year.
2.2 Solvency
PANW has an Altman-Z score of 6.01. This indicates that PANW is financially healthy and has little risk of bankruptcy at the moment.
PANW's Altman-Z score of 6.01 is fine compared to the rest of the industry. PANW outperforms 69.20% 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 | 0.18 | ||
| Altman-Z | 6.01 |
ROIC/WACC0.43
WACC14.01%
2.3 Liquidity
A Current Ratio of 0.84 indicates that PANW may have some problems paying its short term obligations.
PANW's Current ratio of 0.84 is on the low side compared to the rest of the industry. PANW is outperformed by 80.80% of its industry peers.
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.
PANW has a worse Quick ratio (0.84) than 80.43% 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 11.71%, which is quite good.
The Earnings Per Share has been growing by 25.52% on average over the past years. This is a very strong growth
PANW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.86%.
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)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
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 16.56% on average per year.
EPS Next Y16.01%
EPS Next 2Y14.98%
EPS Next 3Y15.3%
EPS Next 5Y22.98%
Revenue Next Year14.57%
Revenue Next 2Y14.82%
Revenue Next 3Y14.77%
Revenue Next 5Y16.56%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 65.83, PANW can be considered very expensive at the moment.
PANW's Price/Earnings ratio is in line with the industry average.
PANW is valuated expensively when we compare the Price/Earnings ratio to 30.30, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 52.87, 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.
The average S&P500 Price/Forward Earnings ratio is at 23.06. PANW is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 65.83 | ||
| Fwd PE | 52.87 |
4.2 Price Multiples
PANW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PANW is cheaper than 60.87% of the companies in the same industry.
67.03% 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 | 44.35 | ||
| EV/EBITDA | 92.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PANW has a very decent profitability rating, which may justify a higher PE ratio.
PANW's earnings are expected to grow with 15.30% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.11
PEG (5Y)2.58
EPS Next 2Y14.98%
EPS Next 3Y15.3%
5. Dividend
5.1 Amount
No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:PANW (2/21/2025, 9:44:09 AM)
198.135
-0.68 (-0.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.58%
Inst Owner Change98.62%
Ins Owners0.88%
Ins Owner Change11.98%
Market Cap130.02B
Analysts78.33
Price Target214.58 (8.3%)
Short Float %3.45%
Short Ratio4.27
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)-0.75%
PT rev (3m)-46.67%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)-48.73%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-49.43%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.93%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 65.83 | ||
| Fwd PE | 52.87 | ||
| P/S | 15.17 | ||
| P/FCF | 44.35 | ||
| P/OCF | 41.83 | ||
| P/B | 20.39 | ||
| P/tB | 83.71 | ||
| EV/EBITDA | 92.71 |
EPS(TTM)3.01
EY1.52%
EPS(NY)3.75
Fwd EY1.89%
FCF(TTM)4.47
FCFY2.25%
OCF(TTM)4.74
OCFY2.39%
SpS13.06
BVpS9.72
TBVpS2.37
PEG (NY)4.11
PEG (5Y)2.58
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 | 6.01 |
F-Score6
WACC14.01%
ROIC/WACC0.43
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 Y16.01%
EPS Next 2Y14.98%
EPS Next 3Y15.3%
EPS Next 5Y22.98%
Revenue 1Y (TTM)13.86%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%14.29%
Revenue Next Year14.57%
Revenue Next 2Y14.82%
Revenue Next 3Y14.77%
Revenue Next 5Y16.56%
EBIT growth 1Y34.39%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year30.17%
EBIT Next 3Y20.54%
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%