PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
NASDAQ:PANW - US6974351057 - Common Stock
185.88 USD
+2.56 (+1.4%)
185.95 USD
+0.07 (+0.04%)
Taking everything into account, PANW scores 5 out of 10 in our fundamental rating. PANW was compared to 282 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. These ratings could make PANW a good candidate 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.
The reported net income has been mixed in the past 5 years: PANW reported negative net income in multiple years.
Of the past 5 years PANW 4 years 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 74.20% of the companies in the same industry.
PANW has a better Return On Equity (17.12%) than 84.81% of its industry peers.
PANW has a better Return On Invested Capital (5.01%) than 74.56% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PANW is significantly below the industry average of 11.99%.
The last Return On Invested Capital (5.01%) for PANW is above the 3 year average (4.95%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROIC | 5.01% |
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 13.95%. This is in the better half of the industry: PANW outperforms 78.45% of its industry peers.
PANW has a Operating Margin of 11.36%. This is in the better half of the industry: PANW outperforms 77.03% of its industry peers.
The Gross Margin of PANW (73.56%) is better than 61.84% of its industry peers.
PANW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.36% | ||
| 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 3Y2.21%
GM growth 5Y0.76%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PANW is destroying value.
PANW has more shares outstanding than it did 1 year ago.
PANW has more shares outstanding than it did 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
An Altman-Z score of 5.70 indicates that PANW is not in any danger for bankruptcy at the moment.
The Altman-Z score of PANW (5.70) is better than 73.14% 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 | 0.13 | ||
| Altman-Z | 5.7 |
ROIC/WACC0.45
WACC11.19%
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: 76.33% 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.
The Quick ratio of PANW (0.90) is worse than 75.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
PANW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.81%, which is quite good.
Measured over the past years, PANW shows a very strong growth in Earnings Per Share. The EPS has been growing by 32.59% on average per year.
The Revenue has grown by 14.87% in the past year. This is quite good.
The Revenue has been growing by 22.03% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)17.81%
EPS 3Y38.4%
EPS 5Y32.59%
EPS Q2Q%25.83%
Revenue 1Y (TTM)14.87%
Revenue growth 3Y18.79%
Revenue growth 5Y22.03%
Sales Q2Q%15.84%
3.2 Future
The Earnings Per Share is expected to grow by 23.53% on average over the next years. This is a very strong growth
Based on estimates for the next years, PANW will show a quite strong growth in Revenue. The Revenue will grow by 14.71% on average per year.
EPS Next Y15.49%
EPS Next 2Y14.51%
EPS Next 3Y14.12%
EPS Next 5Y23.53%
Revenue Next Year14.24%
Revenue Next 2Y13.89%
Revenue Next 3Y13.14%
Revenue Next 5Y14.71%
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
With a Price/Earnings ratio of 55.65, PANW can be considered very expensive at the moment.
PANW's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of PANW to the average of the S&P500 Index (27.24), we can say PANW is valued expensively.
PANW is valuated quite expensively with a Price/Forward Earnings ratio of 48.19.
PANW's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.81, PANW is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.65 | ||
| Fwd PE | 48.19 |
4.2 Price Multiples
PANW's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, PANW is valued a bit cheaper than 65.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.38 | ||
| EV/EBITDA | 89.55 |
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 14.12% in the coming years.
PEG (NY)3.59
PEG (5Y)1.71
EPS Next 2Y14.51%
EPS Next 3Y14.12%
5. Dividend
5.1 Amount
No dividends for PANW!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
185.88
+2.56 (+1.4%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners81.93%
Inst Owner Change1.31%
Ins Owners0.93%
Ins Owner Change-13.28%
Market Cap124.16B
Analysts77.67
Price Target216.71 (16.59%)
Short Float %5.2%
Short Ratio4.58
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)1.01%
PT rev (3m)1.79%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)0.28%
EPS NY rev (1m)2.76%
EPS NY rev (3m)3.46%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.04%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)-0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.65 | ||
| Fwd PE | 48.19 | ||
| P/S | 13.99 | ||
| P/FCF | 41.38 | ||
| P/OCF | 38.7 | ||
| P/B | 17.17 | ||
| P/tB | 50.69 | ||
| EV/EBITDA | 89.55 |
EPS(TTM)3.34
EY1.8%
EPS(NY)3.86
Fwd EY2.08%
FCF(TTM)4.49
FCFY2.42%
OCF(TTM)4.8
OCFY2.58%
SpS13.29
BVpS10.83
TBVpS3.67
PEG (NY)3.59
PEG (5Y)1.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.63% | ||
| ROE | 17.12% | ||
| ROCE | 7.05% | ||
| ROIC | 5.01% | ||
| ROICexc | 6.51% | ||
| ROICexgc | 11.52% | ||
| OM | 11.36% | ||
| PM (TTM) | 13.95% | ||
| GM | 73.56% | ||
| FCFM | 33.81% |
ROA(3y)6.91%
ROA(5y)2.74%
ROE(3y)29.83%
ROE(5y)-23.25%
ROIC(3y)4.95%
ROIC(5y)N/A
ROICexc(3y)6.58%
ROICexc(5y)N/A
ROICexgc(3y)15.61%
ROICexgc(5y)N/A
ROCE(3y)6.97%
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 3Y2.21%
GM growth 5Y0.76%
F-Score6
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 | 238.74% | ||
| Profit Quality | 242.41% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 5.7 |
F-Score6
WACC11.19%
ROIC/WACC0.45
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)17.81%
EPS 3Y38.4%
EPS 5Y32.59%
EPS Q2Q%25.83%
EPS Next Y15.49%
EPS Next 2Y14.51%
EPS Next 3Y14.12%
EPS Next 5Y23.53%
Revenue 1Y (TTM)14.87%
Revenue growth 3Y18.79%
Revenue growth 5Y22.03%
Sales Q2Q%15.84%
Revenue Next Year14.24%
Revenue Next 2Y13.89%
Revenue Next 3Y13.14%
Revenue Next 5Y14.71%
EBIT growth 1Y14.61%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year25.9%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-0.39%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y1.55%
OCF growth 3YN/A
OCF growth 5YN/A