PALO ALTO NETWORKS INC (PANW)

US6974351057 - Common Stock

293.82  +0.33 (+0.11%)

After market: 290 -3.82 (-1.3%)

Fundamental Rating

6

PANW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 276 industry peers in the Software industry. PANW has an average financial health and profitability rating. PANW shows excellent growth, but is valued quite expensive already. These ratings would make PANW suitable for growth investing!



6

1. Profitability

1.1 Basic Checks

In the past year PANW was profitable.
In the past year PANW had a positive cash flow from operations.
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

PANW's Return On Assets of 12.45% is amongst the best of the industry. PANW outperforms 93.07% of its industry peers.
The Return On Equity of PANW (52.25%) is better than 97.81% of its industry peers.
With an excellent Return On Invested Capital value of 5.74%, PANW belongs to the best of the industry, outperforming 82.48% of the companies in the same industry.
Industry RankSector Rank
ROA 12.45%
ROE 52.25%
ROIC 5.74%
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 better Profit Margin (30.24%) than 95.62% of its industry peers.
With an excellent Operating Margin value of 10.33%, PANW belongs to the best of the industry, outperforming 83.21% of the companies in the same industry.
PANW has a better Gross Margin (74.05%) than 66.79% 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 RankSector Rank
OM 10.33%
PM (TTM) 30.24%
GM 74.05%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.76%
GM growth 5Y0.19%

5

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PANW is destroying value.
PANW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PANW has more shares outstanding
The debt/assets ratio for PANW has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.60 indicates that PANW is not in any danger for bankruptcy at the moment.
PANW's Altman-Z score of 4.60 is fine compared to the rest of the industry. PANW outperforms 68.25% 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0.62
Altman-Z 4.6
ROIC/WACC0.59
WACC9.78%

2.3 Liquidity

PANW has a Current Ratio of 0.83. 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 has a Current ratio of 0.83. This is amonst the worse of the industry: PANW underperforms 84.31% of its industry peers.
PANW has a Quick Ratio of 0.83. 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 Quick ratio of 0.83 is on the low side compared to the rest of the industry. PANW is outperformed by 83.21% of its industry peers.
Industry RankSector Rank
Current Ratio 0.83
Quick Ratio 0.83

9

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 64.36% over the past year.
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.
Looking at the last year, PANW shows a very strong growth in Revenue. The Revenue has grown by 22.28%.
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)64.36%
EPS 3Y39.45%
EPS 5Y27.93%
EPS growth Q2Q39.05%
Revenue 1Y (TTM)22.28%
Revenue growth 3Y26.46%
Revenue growth 5Y24.83%
Revenue growth Q2Q19.33%

3.2 Future

The Earnings Per Share is expected to grow by 23.50% on average over the next years. This is a very strong growth
PANW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 18.02% yearly.
EPS Next Y26.96%
EPS Next 2Y19.11%
EPS Next 3Y18.86%
EPS Next 5Y23.5%
Revenue Next Year15.81%
Revenue Next 2Y15.04%
Revenue Next 3Y15.64%
Revenue Next 5Y18.02%

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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

3

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 54.61 indicates a quite expensive valuation of PANW.
Compared to the rest of the industry, the Price/Earnings ratio of PANW indicates a somewhat cheap valuation: PANW is cheaper than 63.87% of the companies listed in the same industry.
PANW is valuated expensively when we compare the Price/Earnings ratio to 25.25, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 46.86 indicates a quite expensive valuation of PANW.
PANW's Price/Forward Earnings is on the same level as the industry average.
PANW is valuated expensively when we compare the Price/Forward Earnings ratio to 21.67, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 54.61
Fwd PE 46.86

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PANW indicates a somewhat cheap valuation: PANW is cheaper than 64.23% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, PANW is valued a bit cheaper than the industry average as 73.72% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 32.49
EV/EBITDA 87.13

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.
The decent profitability rating of PANW may justify a higher PE ratio.
PANW's earnings are expected to grow with 18.86% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.03
PEG (5Y)1.96
EPS Next 2Y19.11%
EPS Next 3Y18.86%

0

5. Dividend

5.1 Amount

PANW does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

PALO ALTO NETWORKS INC

NASDAQ:PANW (4/24/2024, 7:00:03 PM)

After market: 290 -3.82 (-1.3%)

293.82

+0.33 (+0.11%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap94.93B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield N/A
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 54.61
Fwd PE 46.86
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.03
PEG (5Y)1.96
Profitability
Industry RankSector Rank
ROA 12.45%
ROE 52.25%
ROCE
ROIC
ROICexc
ROICexgc
OM 10.33%
PM (TTM) 30.24%
GM 74.05%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
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 Turnover0.41
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.83
Quick Ratio 0.83
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)
Growth
EPS 1Y (TTM)64.36%
EPS 3Y39.45%
EPS 5Y
EPS growth Q2Q
EPS Next Y26.96%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)22.28%
Revenue growth 3Y26.46%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y