PALO ALTO NETWORKS INC (PANW) Stock Fundamental Analysis
USA - NASDAQ:PANW - US6974351057 - Common Stock
207.19 USD
-2.11 (-1.01%)
207.3 USD
+0.11 (+0.05%)
PANW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 281 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 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
In the past year PANW was profitable.
In the past year PANW had a positive cash flow from operations.
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 73.67% of the companies in the same industry.
PANW's Return On Equity of 17.12% is amongst the best of the industry. PANW outperforms 84.70% of its industry peers.
PANW has a Return On Invested Capital of 5.01%. This is in the better half of the industry: PANW outperforms 73.31% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PANW is significantly below the industry average of 11.95%.
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
The Profit Margin of PANW (13.95%) is better than 77.58% of its industry peers.
With a decent Operating Margin value of 11.36%, PANW is doing good in the industry, outperforming 76.87% of the companies in the same industry.
Looking at the Gross Margin, with a value of 73.56%, PANW is in the better half of the industry, outperforming 61.92% of the companies in the same industry.
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.
The number of shares outstanding for PANW has been increased compared to 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
PANW has an Altman-Z score of 6.34. This indicates that PANW is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.34, PANW is in the better half of the industry, outperforming 74.02% 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 | 6.34 |
ROIC/WACC0.44
WACC11.29%
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 76.51% of its industry peers.
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 75.80% of its industry peers.
| 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 17.81% 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 32.59% on average per year.
Looking at the last year, PANW shows a quite strong growth in Revenue. The Revenue has grown by 14.87% in the last year.
PANW shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.03% yearly.
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
Based on estimates for the next years, PANW will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.15% on average per year.
Based on estimates for the next years, PANW will show a quite strong growth in Revenue. The Revenue will grow by 13.00% on average per year.
EPS Next Y16.41%
EPS Next 2Y14.66%
EPS Next 3Y14.34%
EPS Next 5Y15.15%
Revenue Next Year14.44%
Revenue Next 2Y13.93%
Revenue Next 3Y13.18%
Revenue Next 5Y13%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
Based on the Price/Earnings ratio of 62.03, the valuation of PANW can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as PANW.
PANW is valuated expensively when we compare the Price/Earnings ratio to 27.86, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 53.29 indicates a quite expensive valuation of PANW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PANW is on the same level as its industry peers.
PANW's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 23.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.03 | ||
| Fwd PE | 53.29 |
4.2 Price Multiples
PANW's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, PANW is valued a bit cheaper than 62.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.19 | ||
| EV/EBITDA | 101.34 |
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.
PANW's earnings are expected to grow with 14.34% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.78
PEG (5Y)1.9
EPS Next 2Y14.66%
EPS Next 3Y14.34%
5. Dividend
5.1 Amount
PANW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
207.19
-2.11 (-1.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.03%
Inst Owner Change1.3%
Ins Owners0.91%
Ins Owner Change-13.24%
Market Cap138.59B
Analysts79.02
Price Target217 (4.73%)
Short Float %7.54%
Short Ratio5.52
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)0.14%
PT rev (3m)1.3%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)0.01%
EPS NY rev (1m)0.8%
EPS NY rev (3m)3.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.03 | ||
| Fwd PE | 53.29 | ||
| P/S | 15.62 | ||
| P/FCF | 46.19 | ||
| P/OCF | 43.2 | ||
| P/B | 19.17 | ||
| P/tB | 56.58 | ||
| EV/EBITDA | 101.34 |
EPS(TTM)3.34
EY1.61%
EPS(NY)3.89
Fwd EY1.88%
FCF(TTM)4.49
FCFY2.17%
OCF(TTM)4.8
OCFY2.31%
SpS13.27
BVpS10.81
TBVpS3.66
PEG (NY)3.78
PEG (5Y)1.9
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 | 6.34 |
F-Score6
WACC11.29%
ROIC/WACC0.44
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 Y16.41%
EPS Next 2Y14.66%
EPS Next 3Y14.34%
EPS Next 5Y15.15%
Revenue 1Y (TTM)14.87%
Revenue growth 3Y18.79%
Revenue growth 5Y22.03%
Sales Q2Q%15.84%
Revenue Next Year14.44%
Revenue Next 2Y13.93%
Revenue Next 3Y13.18%
Revenue Next 5Y13%
EBIT growth 1Y14.61%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year28.4%
EBIT Next 3Y18.38%
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