PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
NASDAQ:PANW - Nasdaq - US6974351057 - Common Stock - Currency: USD
Taking everything into account, PANW scores 5 out of 10 in our fundamental rating. PANW was compared to 283 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.
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 5.63%, PANW is in the better half of the industry, outperforming 76.33% of the companies in the same industry.
The Return On Equity of PANW (17.12%) is better than 83.39% of its industry peers.
PANW has a Return On Invested Capital of 5.89%. This is in the better half of the industry: PANW outperforms 76.68% of its industry peers.
| 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
With a decent Profit Margin value of 13.95%, PANW is doing good in the industry, outperforming 79.51% of the companies in the same industry.
Looking at the Operating Margin, with a value of 12.21%, PANW is in the better half of the industry, outperforming 78.80% of the companies in the same industry.
PANW's Gross Margin of 73.56% is fine compared to the rest of the industry. PANW outperforms 63.25% 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 | 12.21% | ||
| 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
PANW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for PANW has been increased compared to 1 year ago.
The number of shares outstanding for PANW has been increased compared to 5 years ago.
Compared to 1 year ago, PANW has an improved debt to assets ratio.
2.2 Solvency
PANW has an Altman-Z score of 5.67. This indicates that PANW is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.67, PANW is doing good in the industry, outperforming 72.79% 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 | 0.13 | ||
| Altman-Z | 5.67 |
ROIC/WACC0.54
WACC10.97%
2.3 Liquidity
PANW has a Current Ratio of 0.90. This is a bad value and indicates that PANW is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.90, PANW is not doing good in the industry: 79.15% of the companies in the same industry are doing better.
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 78.45% 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.
The Earnings Per Share has been growing by 25.52% on average over the past years. This is a very strong growth
The Revenue has grown by 13.91% in the past year. This is quite good.
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)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
PANW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.51% yearly.
PANW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.53% yearly.
EPS Next Y15.8%
EPS Next 2Y14.68%
EPS Next 3Y15.14%
EPS Next 5Y23.51%
Revenue Next Year14.56%
Revenue Next 2Y14.71%
Revenue Next 3Y14.69%
Revenue Next 5Y15.53%
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
A Price/Earnings ratio of 59.09 indicates a quite expensive valuation of PANW.
PANW's Price/Earnings ratio is in line with the industry average.
PANW's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.91.
PANW is valuated quite expensively with a Price/Forward Earnings ratio of 49.93.
The rest of the industry has a similar Price/Forward Earnings ratio as PANW.
PANW's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.09 | ||
| Fwd PE | 49.93 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PANW.
Based on the Price/Free Cash Flow ratio, PANW is valued a bit cheaper than 65.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.07 | ||
| EV/EBITDA | 84.13 |
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.
A more expensive valuation may be justified as PANW's earnings are expected to grow with 15.14% in the coming years.
PEG (NY)3.74
PEG (5Y)2.32
EPS Next 2Y14.68%
EPS Next 3Y15.14%
5. Dividend
5.1 Amount
PANW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
186.14
+4.88 (+2.69%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners81.36%
Inst Owner Change3.45%
Ins Owners1.03%
Ins Owner Change7.4%
Market Cap123.24B
Analysts78.33
Price Target212.9 (14.38%)
Short Float %3.85%
Short Ratio4.88
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)-1.2%
PT rev (3m)1.64%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.42%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)1.47%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.09 | ||
| Fwd PE | 49.93 | ||
| P/S | 13.89 | ||
| P/FCF | 41.07 | ||
| P/OCF | 38.42 | ||
| P/B | 17.04 | ||
| P/tB | 50.31 | ||
| EV/EBITDA | 84.13 |
EPS(TTM)3.15
EY1.69%
EPS(NY)3.73
Fwd EY2%
FCF(TTM)4.53
FCFY2.43%
OCF(TTM)4.85
OCFY2.6%
SpS13.4
BVpS10.92
TBVpS3.7
PEG (NY)3.74
PEG (5Y)2.32
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 | 5.67 |
F-Score5
WACC10.97%
ROIC/WACC0.54
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 Y15.8%
EPS Next 2Y14.68%
EPS Next 3Y15.14%
EPS Next 5Y23.51%
Revenue 1Y (TTM)13.91%
Revenue growth 3Y23.55%
Revenue growth 5Y22.59%
Sales Q2Q%15.33%
Revenue Next Year14.56%
Revenue Next 2Y14.71%
Revenue Next 3Y14.69%
Revenue Next 5Y15.53%
EBIT growth 1Y23.22%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year32.04%
EBIT Next 3Y21.18%
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%