Palo Alto Networks, Inc.

NEOE:PANW Stock Report

Market Cap: CA$175.8b

Palo Alto Networks Valuation

Is PANW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of PANW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PANW (CA$23.51) is trading below our estimate of fair value (CA$31.73)

Significantly Below Fair Value: PANW is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PANW?

Key metric: As PANW is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for PANW. This is calculated by dividing PANW's market cap by their current earnings.
What is PANW's PE Ratio?
PE Ratio46x
EarningsUS$2.73b
Market CapUS$125.78b

Price to Earnings Ratio vs Peers

How does PANW's PE Ratio compare to its peers?

The above table shows the PE ratio for PANW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average74.3x
CSU Constellation Software
118.5x26.6%CA$97.2b
DSG Descartes Systems Group
77.6x14.3%CA$13.9b
GIB.A CGI
20.8x7.2%CA$35.2b
TOI Topicus.com
80.4xn/aCA$9.8b
PANW Palo Alto Networks
46x-4.2%CA$125.8b

Price-To-Earnings vs Peers: PANW is good value based on its Price-To-Earnings Ratio (46x) compared to the peer average (74.3x).

Price to Earnings Ratio vs Industry

How does PANW's PE Ratio compare vs other companies in the CA Software Industry?

8 CompaniesPrice / EarningsEstimated GrowthMarket Cap
GRDI Griid Infrastructure
3.3xn/aUS$70.78m
IDLE.X Generative AI Solutions
0.08xn/aUS$8.15m
LIQD Liquid Meta Capital Holdings
2.4xn/aUS$2.74m
SPAI Sparc Al
1.2xn/aUS$2.66m
PANW 46.0xIndustry Avg. 41.7xNo. of Companies8PE020406080100+
8 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: PANW is expensive based on its Price-To-Earnings Ratio (46x) compared to the Canadian Software industry average (41.7x).

Price to Earnings Ratio vs Fair Ratio

What is PANW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PANW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio46x
Fair PE Ratio60x

Price-To-Earnings vs Fair Ratio: PANW is good value based on its Price-To-Earnings Ratio (46x) compared to the estimated Fair Price-To-Earnings Ratio (60x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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