PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
NASDAQ:PANW - Nasdaq - US6974351057 - Common Stock - Currency: USD
Overall PANW gets a fundamental rating of 5 out of 10. We evaluated PANW against 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
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.
Each year in the past 5 years PANW had a positive operating cash flow.
1.2 Ratios
The Return On Assets of PANW (5.63%) is better than 76.76% of its industry peers.
With an excellent Return On Equity value of 17.12%, PANW belongs to the best of the industry, outperforming 84.86% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.89%, PANW is in the better half of the industry, outperforming 77.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROIC | 5.89% |
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
PANW has a better Profit Margin (13.95%) than 81.34% of its industry peers.
Looking at the Operating Margin, with a value of 12.21%, PANW is in the better half of the industry, outperforming 78.52% of the companies in the same industry.
PANW has a better Gross Margin (73.56%) than 61.97% of its industry peers.
PANW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.21% | ||
| PM (TTM) | 13.95% | ||
| GM | 73.56% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PANW is destroying value.
Compared to 1 year ago, PANW has more shares outstanding
Compared to 5 years ago, PANW has more shares outstanding
PANW has a better debt/assets ratio than last year.
2.2 Solvency
PANW has an Altman-Z score of 6.02. This indicates that PANW is financially healthy and has little risk of bankruptcy at the moment.
PANW has a Altman-Z score of 6.02. This is in the better half of the industry: PANW outperforms 73.94% of its industry peers.
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 | 0.13 | ||
| Altman-Z | 6.02 |
ROIC/WACC0.53
WACC11.1%
2.3 Liquidity
A Current Ratio of 0.90 indicates that PANW may have some problems paying its short term obligations.
PANW has a Current ratio of 0.90. This is in the lower half of the industry: PANW underperforms 77.46% of its industry peers.
A Quick Ratio of 0.90 indicates that PANW may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.90, PANW is doing worse than 77.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.32% over the past year.
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 13.91%.
PANW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.59% yearly.
EPS 1Y (TTM)12.32%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%21.21%
Revenue 1Y (TTM)13.91%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%15.33%
3.2 Future
Based on estimates for the next years, PANW will show a very strong growth in Earnings Per Share. The EPS will grow by 22.92% on average per year.
The Revenue is expected to grow by 15.14% on average over the next years. This is quite good.
EPS Next Y17.8%
EPS Next 2Y15.13%
EPS Next 3Y15.17%
EPS Next 5Y22.92%
Revenue Next Year14.83%
Revenue Next 2Y14.54%
Revenue Next 3Y14.44%
Revenue Next 5Y15.14%
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.
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 62.75, PANW can be considered very expensive at the moment.
PANW's Price/Earnings is on the same level as the industry average.
PANW's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.60.
Based on the Price/Forward Earnings ratio of 52.60, the valuation of PANW can be described as expensive.
PANW's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of PANW to the average of the S&P500 Index (22.39), we can say PANW is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.75 | ||
| Fwd PE | 52.6 |
4.2 Price Multiples
60.21% of the companies in the same industry are more expensive than PANW, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, PANW is valued a bit cheaper than 64.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.93 | ||
| EV/EBITDA | 90.16 |
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.
A more expensive valuation may be justified as PANW's earnings are expected to grow with 15.17% in the coming years.
PEG (NY)3.53
PEG (5Y)2.46
EPS Next 2Y15.13%
EPS Next 3Y15.17%
5. Dividend
5.1 Amount
No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
197.67
+3.28 (+1.69%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners81.36%
Inst Owner Change3.7%
Ins Owners1.03%
Ins Owner Change-6.81%
Market Cap131.81B
Analysts78.03
Price Target214.4 (8.46%)
Short Float %3.94%
Short Ratio4.45
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)2.01%
Min EPS beat(2)1.85%
Max EPS beat(2)2.16%
EPS beat(4)4
Avg EPS beat(4)3.09%
Min EPS beat(4)1.85%
Max EPS beat(4)5.04%
EPS beat(8)8
Avg EPS beat(8)6.54%
EPS beat(12)12
Avg EPS beat(12)10.13%
EPS beat(16)16
Avg EPS beat(16)8.85%
Revenue beat(2)0
Avg Revenue beat(2)-1.31%
Min Revenue beat(2)-1.46%
Max Revenue beat(2)-1.16%
Revenue beat(4)0
Avg Revenue beat(4)-1.11%
Min Revenue beat(4)-1.46%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-1.18%
Revenue beat(12)0
Avg Revenue beat(12)-1.27%
Revenue beat(16)4
Avg Revenue beat(16)-0.65%
PT rev (1m)0.38%
PT rev (3m)-0.83%
EPS NQ rev (1m)2.08%
EPS NQ rev (3m)2.06%
EPS NY rev (1m)1.7%
EPS NY rev (3m)1.54%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)0.12%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.75 | ||
| Fwd PE | 52.6 | ||
| P/S | 14.85 | ||
| P/FCF | 43.93 | ||
| P/OCF | 41.09 | ||
| P/B | 18.23 | ||
| P/tB | 53.81 | ||
| EV/EBITDA | 90.16 |
EPS(TTM)3.15
EY1.59%
EPS(NY)3.76
Fwd EY1.9%
FCF(TTM)4.5
FCFY2.28%
OCF(TTM)4.81
OCFY2.43%
SpS13.31
BVpS10.84
TBVpS3.67
PEG (NY)3.53
PEG (5Y)2.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROCE | 7.58% | ||
| ROIC | 5.89% | ||
| ROICexc | 7.65% | ||
| ROICexgc | 13.54% | ||
| OM | 12.21% | ||
| PM (TTM) | 13.95% | ||
| GM | 73.56% | ||
| FCFM | 33.81% |
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-Score5
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.13 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 61.75% | ||
| Cap/Sales | 2.34% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 226% | ||
| Profit Quality | 242.41% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 6.02 |
F-Score5
WACC11.1%
ROIC/WACC0.53
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)12.32%
EPS 3Y40.37%
EPS 5Y25.52%
EPS Q2Q%21.21%
EPS Next Y17.8%
EPS Next 2Y15.13%
EPS Next 3Y15.17%
EPS Next 5Y22.92%
Revenue 1Y (TTM)13.91%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%15.33%
Revenue Next Year14.83%
Revenue Next 2Y14.54%
Revenue Next 3Y14.44%
Revenue Next 5Y15.14%
EBIT growth 1Y23.22%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year32.09%
EBIT Next 3Y20.86%
EBIT Next 5YN/A
FCF growth 1Y9.56%
FCF growth 3Y30.76%
FCF growth 5Y27.39%
OCF growth 1Y11.11%
OCF growth 3Y29.41%
OCF growth 5Y25.28%