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 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 shows excellent growth, but is valued quite expensive already. These ratings could make PANW a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
- In the past year PANW was profitable.
- PANW had a positive operating cash flow in the past year.
- 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
- The Return On Assets of PANW (4.75%) is better than 72.20% of its industry peers.
- With a decent Return On Equity value of 12.89%, PANW is doing good in the industry, outperforming 76.53% of the companies in the same industry.
- PANW's Return On Invested Capital of 5.58% is fine compared to the rest 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 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
- With a decent Profit Margin value of 11.69%, PANW is doing good in the industry, outperforming 72.20% of the companies in the same industry.
- PANW's Operating Margin of 13.24% is fine compared to the rest of the industry. PANW outperforms 79.42% of its industry peers.
- The Gross Margin of PANW (73.47%) 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
- PANW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
- 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
- PANW has an Altman-Z score of 5.87. This indicates that PANW is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 5.87, PANW is in the better half of the industry, outperforming 76.53% of the companies in the same industry.
- 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 | 5.87 |
ROIC/WACC0.5
WACC11.1%
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 75.45% of its industry peers.
- A Quick Ratio of 0.99 indicates that PANW may have some problems paying its short term obligations.
- With a Quick ratio value of 0.99, PANW is not doing good in the industry: 74.37% of the companies in the same industry are doing better.
| 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.
- PANW shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.30%.
- 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.
- PANW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.08% yearly.
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.
- 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
- PANW is valuated quite expensively with a Price/Earnings ratio of 51.63.
- Compared to the rest of the industry, the Price/Earnings ratio of PANW is on the same level as its industry peers.
- When comparing the Price/Earnings ratio of PANW to the average of the S&P500 Index (27.21), we can say PANW is valued expensively.
- Based on the Price/Forward Earnings ratio of 40.72, the valuation of PANW can be described as expensive.
- PANW's Price/Forward Earnings ratio is in line with the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. PANW is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.63 | ||
| Fwd PE | 40.72 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PANW is on the same level as its industry peers.
- Based on the Price/Free Cash Flow ratio, PANW is valued a bit cheaper than 65.70% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.02 | ||
| 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.
- 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
- 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 51.63 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 17.92% in the next year.