PALO ALTO NETWORKS INC (PANW)
US6974351057 - Common Stock
We assign a fundamental rating of 6 out of 10 to PANW. PANW was compared to 284 industry peers in the Software industry. PANW has only an average score on both its financial health and profitability. PANW is valued quite expensive, but it does show an excellent growth. This makes PANW very considerable 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.
PANW had negative earnings in 4 of the past 5 years.
Each year in the past 5 years PANW had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 13.65%, PANW belongs to the best of the industry, outperforming 92.23% of the companies in the same industry.
Looking at the Return On Equity, with a value of 54.78%, PANW belongs to the top of the industry, outperforming 97.88% of the companies in the same industry.
PANW has a better Return On Invested Capital (6.30%) than 81.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.65% | ||
| ROE | 54.78% | ||
| ROIC | 6.3% |
ROA(3y)-1.34%
ROA(5y)-1.64%
ROE(3y)-60.19%
ROE(5y)-41.99%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
PANW has a Profit Margin of 31.41%. This is amongst the best in the industry. PANW outperforms 95.76% of its industry peers.
Looking at the Operating Margin, with a value of 11.29%, PANW belongs to the top of the industry, outperforming 83.75% of the companies in the same industry.
The Gross Margin of PANW (74.43%) is better than 66.08% 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 | 11.29% | ||
| PM (TTM) | 31.41% | ||
| GM | 74.43% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.76%
GM growth 5Y0.19%
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
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
An Altman-Z score of 5.22 indicates that PANW is not in any danger for bankruptcy at the moment.
PANW has a better Altman-Z score (5.22) than 68.20% 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 | 0.39 | ||
| Altman-Z | 5.22 |
ROIC/WACC0.63
WACC9.92%
2.3 Liquidity
A Current Ratio of 0.84 indicates that PANW may have some problems paying its short term obligations.
PANW has a worse Current ratio (0.84) than 81.63% of its industry peers.
A Quick Ratio of 0.84 indicates that PANW may have some problems paying its short term obligations.
PANW has a worse Quick ratio (0.84) than 80.57% 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 48.28%, which is quite impressive.
Measured over the past years, PANW shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.93% on average per year.
PANW shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.05%.
Measured over the past years, PANW shows a very strong growth in Revenue. The Revenue has been growing by 24.83% on average per year.
EPS 1Y (TTM)48.28%
EPS 3Y39.45%
EPS 5Y27.93%
EPS Q2Q%20%
Revenue 1Y (TTM)20.05%
Revenue growth 3Y26.46%
Revenue growth 5Y24.83%
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 22.14% on average per year.
PANW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.87% yearly.
EPS Next Y28.57%
EPS Next 2Y19.57%
EPS Next 3Y18.46%
EPS Next 5Y22.14%
Revenue Next Year16.04%
Revenue Next 2Y15.01%
Revenue Next 3Y15.5%
Revenue Next 5Y16.87%
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
With a Price/Earnings ratio of 58.36, PANW can be considered very expensive at the moment.
Based on the Price/Earnings ratio, PANW is valued a bit cheaper than the industry average as 60.42% of the companies are valued more expensively.
PANW's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.41.
Based on the Price/Forward Earnings ratio of 51.72, the valuation of PANW can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as PANW.
When comparing the Price/Forward Earnings ratio of PANW to the average of the S&P500 Index (20.59), we can say PANW is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.36 | ||
| Fwd PE | 51.72 |
4.2 Price Multiples
PANW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PANW is cheaper than 61.84% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PANW indicates a somewhat cheap valuation: PANW is cheaper than 72.08% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.13 | ||
| EV/EBITDA | 86.86 |
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.
A more expensive valuation may be justified as PANW's earnings are expected to grow with 18.46% in the coming years.
PEG (NY)2.04
PEG (5Y)2.09
EPS Next 2Y19.57%
EPS Next 3Y18.46%
5. Dividend
5.1 Amount
No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
PALO ALTO NETWORKS INC
NASDAQ:PANW (7/26/2024, 7:00:02 PM)
After market: 327 +0.19 (+0.06%)326.81
+6.68 (+2.09%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap105.82B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.36 | ||
| Fwd PE | 51.72 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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OCF(TTM)
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SpS
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TBVpS
PEG (NY)2.04
PEG (5Y)2.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.65% | ||
| ROE | 54.78% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.29% | ||
| PM (TTM) | 31.41% | ||
| GM | 74.43% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
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ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)48.28%
EPS 3Y39.45%
EPS 5Y
EPS Q2Q%
EPS Next Y28.57%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)20.05%
Revenue growth 3Y26.46%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
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EBIT growth 3Y
EBIT growth 5Y
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