179.86 USD
-2.41 (-1.32%)
PANW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 277 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 is valued quite expensively, but it does show have an excellent growth rating. These ratings would make PANW suitable for growth investing!
1. Profitability
1.1 Basic Checks
- PANW had positive earnings in the past year.
- PANW had a positive operating cash flow in the past year.
- In multiple years PANW reported negative net income over the last 5 years.
- PANW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of PANW (4.75%) is better than 72.20% of its industry peers.
- PANW has a Return On Equity of 12.89%. This is in the better half of the industry: PANW outperforms 76.53% of its industry peers.
- PANW has a Return On Invested Capital of 5.58%. This is in the better half of the industry: PANW outperforms 74.37% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for PANW is significantly below the industry average of 10.78%.
- The 3 year average ROIC (4.95%) for PANW is below the current ROIC(5.58%), indicating increased profibility in the last year.
| 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 Profit Margin of 11.69%. This is in the better half of the industry: PANW outperforms 72.20% of its industry peers.
- With a decent Operating Margin value of 13.24%, PANW is doing good in the industry, outperforming 79.42% of the companies in the same industry.
- Looking at the Gross Margin, with a value of 73.47%, PANW is in line with its industry, outperforming 59.21% of the companies in the same industry.
- PANW's Gross Margin has been stable in the last couple of years.
| 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
- 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
- PANW has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- An Altman-Z score of 5.87 indicates that PANW is not in any danger for bankruptcy at the moment.
- With a decent Altman-Z score value of 5.87, PANW is doing good in the industry, outperforming 76.53% of the companies in the same industry.
- 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 | ||
| Altman-Z | 5.87 |
ROIC/WACC0.5
WACC11.09%
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.
- The Current ratio of PANW (0.99) is worse than 75.45% of its industry peers.
- PANW has a Quick 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 Quick ratio of 0.99 is on the low side compared to the rest of the industry. PANW is outperformed by 74.37% 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.
- PANW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 32.59% yearly.
- The Revenue has grown by 15.30% in the past year. This is quite good.
- PANW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.03% yearly.
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.
- The Revenue is expected to grow by 13.08% on average over the next years. This is quite good.
EPS Next Y17.92%
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.
- 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
- The Price/Earnings ratio is 51.54, which means the current valuation is very expensive for PANW.
- Compared to the rest of the industry, the Price/Earnings ratio of PANW is on the same level as its industry peers.
- PANW's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.30.
- A Price/Forward Earnings ratio of 40.65 indicates a quite expensive valuation of PANW.
- PANW's Price/Forward Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, PANW is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.54 | ||
| Fwd PE | 40.65 |
4.2 Price Multiples
- PANW's Enterprise Value to EBITDA is on the same level as the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of PANW indicates a somewhat cheap valuation: PANW is cheaper than 65.70% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.96 | ||
| EV/EBITDA | 75.4 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- A more expensive valuation may be justified as PANW's earnings are expected to grow with 14.77% in the coming years.
PEG (NY)2.88
PEG (5Y)1.58
EPS Next 2Y15.09%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
- PANW does not give a dividend.
| 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 51.54 and the Price/Book (PB) ratio is 14.47.
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 17.92% in the next year.