| Snowflake Score | |
|---|---|
| Valuation | 2/6 |
| Future Growth | 5/6 |
| Past Performance | 0/6 |
| Financial Health | 3/6 |
| Dividends | 0/6 |
PANW Stock Overview
Palo Alto Networks, Inc. provides cybersecurity solutions worldwide.
Rewards
Risk Analysis
No risks detected for PANW from our risk checks.
Palo Alto Networks Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$483.63 |
| 52 Week High | US$572.67 |
| 52 Week Low | US$311.56 |
| Beta | 1.36 |
| 1 Month Change | -12.82% |
| 3 Month Change | -4.07% |
| 1 Year Change | 32.64% |
| 3 Year Change | 130.61% |
| 5 Year Change | 233.12% |
| Change since IPO | 810.28% |
Recent News & Updates
The Ultimate Investor Guide To Zero Trust
An overview of what will be driving the huge demand for cybersecurity for years to come. A Zero Trust Architecture [ZTA] is the only approach for enterprises to secure themselves, though it’s still very much in its nascent stage. We deep dive into the threat landscape, ZTA, and discuss the various companies with competitive advantages and also consider their valuations.
Palo Alto: Prisma SASE And Prisma Cloud May Make The Price Spike Up
Palo Alto Networks, Inc. is a global cybersecurity provider working with governments, service providers, and large enterprises. Palo Alto is very well positioned to receive investments and demands from clients. Take into account that the company is a leader in many Gartner Magic Quadrants. I would expect SASE customer adoption in the near future. Take into account that the numbers in Q1 2022 were quite impressive. We are talking about customer growth of 100%. With a WACC of around 8.5%, a terminal value of 30.95x, and net debt of approximately $510 million, the implied stock price would be equal to $1500. The implied stock price would be $767-$863. With traders currently buying shares at $501-$601, I believe that there is significant upside potential in the stock price.
Palo Alto Networks (NASDAQ:PANW) Is Making Moderate Use Of Debt
Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...
Shareholder Returns
| PANW | US Software | US Market | |
|---|---|---|---|
| 7D | -3.1% | -5.5% | -6.1% |
| 1Y | 32.6% | 6.1% | 4.2% |
Return vs Industry: PANW exceeded the US Software industry which returned 9.6% over the past year.
Return vs Market: PANW exceeded the US Market which returned 6.6% over the past year.
Price Volatility
| PANW volatility | |
|---|---|
| PANW Average Weekly Movement | 5.4% |
| Software Industry Average Movement | 8.6% |
| Market Average Movement | 6.7% |
| 10% most volatile stocks in US Market | 15.6% |
| 10% least volatile stocks in US Market | 2.4% |
Stable Share Price: PANW is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: PANW's weekly volatility (5%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 2005 | 11,098 | Nikesh Arora | https://www.paloaltonetworks.com |
Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; Panorama, a security management solution for the control of firewall appliances and software deployed on an end-customer’s network and instances in public or private cloud environments, as a virtual or a physical appliance; and virtual system upgrades, which are available as extensions to the virtual system capacity that ships with physical appliances. It also provides subscription services covering the areas of threat prevention, malware and persistent threat, uniform resource locator filtering, laptop and mobile device protection, and firewall; and DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention.
Palo Alto Networks Fundamentals Summary
| PANW fundamental statistics | |
|---|---|
| Market Cap | US$47.72b |
| Earnings (TTM) | -US$510.30m |
| Revenue (TTM) | US$4.56b |
10.5x
P/S Ratio-93.5x
P/E RatioIs PANW overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| PANW income statement (TTM) | |
|---|---|
| Revenue | US$4.56b |
| Cost of Revenue | US$1.38b |
| Gross Profit | US$3.18b |
| Expenses | US$3.69b |
| Earnings | -US$510.30m |
Last Reported Earnings
Oct 31, 2021
Next Earnings Date
n/a
| Earnings per share (EPS) | -5.17 |
| Gross Margin | 69.77% |
| Net Profit Margin | -11.20% |
| Debt/Equity Ratio | 707.7% |
How did PANW perform over the long term?
See historical performance and comparisonValuation
Is Palo Alto Networks undervalued compared to its fair value and its price relative to the market?
>50%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: PANW ($483.63) is trading below our estimate of fair value ($1000.15)
Significantly Below Fair Value: PANW is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: PANW is unprofitable, so we can't compare its PE Ratio to the US Software industry average.
PE vs Market: PANW is unprofitable, so we can't compare its PE Ratio to the US market.
Price to Earnings Growth Ratio
PEG Ratio: Insufficient data to calculate PANW's PEG Ratio to determine if it is good value.
Price to Book Ratio
PB vs Industry: PANW is overvalued based on its PB Ratio (92x) compared to the US Software industry average (4.9x).
Future Growth
How is Palo Alto Networks forecast to perform in the next 1 to 3 years based on estimates from 35 analysts?
43.6%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: PANW is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2%).
Earnings vs Market: PANW is forecast to become profitable over the next 3 years, which is considered above average market growth.
High Growth Earnings: PANW's is expected to become profitable in the next 3 years.
Revenue vs Market: PANW's revenue (17.8% per year) is forecast to grow faster than the US market (9.2% per year).
High Growth Revenue: PANW's revenue (17.8% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: PANW's Return on Equity is forecast to be very high in 3 years time (54.2%).
Past Performance
How has Palo Alto Networks performed over the past 5 years?
-22.7%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: PANW is currently unprofitable.
Growing Profit Margin: PANW is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: PANW is unprofitable, and losses have increased over the past 5 years at a rate of 22.7% per year.
Accelerating Growth: Unable to compare PANW's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: PANW is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (20.5%).
Return on Equity
High ROE: PANW has a negative Return on Equity (-98.34%), as it is currently unprofitable.
Financial Health
How is Palo Alto Networks's financial position?
Financial Position Analysis
Short Term Liabilities: PANW's short term assets ($4.8B) do not cover its short term liabilities ($7.1B).
Long Term Liabilities: PANW's short term assets ($4.8B) exceed its long term liabilities ($2.8B).
Debt to Equity History and Analysis
Debt Level: PANW's net debt to equity ratio (40.6%) is considered high.
Reducing Debt: PANW's debt to equity ratio has increased from 59.1% to 707.7% over the past 5 years.
Balance Sheet
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: Whilst unprofitable PANW has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.
Forecast Cash Runway: PANW is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 15.9% per year.
Dividend
What is Palo Alto Networks's current dividend yield, its reliability and sustainability?
Dividend Yield vs Market
Notable Dividend: Unable to evaluate PANW's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate PANW's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if PANW's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if PANW's dividend payments have been increasing.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of PANW's dividend in 3 years as they are not forecast to pay a notable one for the US market.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
3.6yrs
Average management tenure
CEO
Nikesh Arora (53 yo)
3.58yrs
Tenure
US$23,283,858
Compensation
Mr. Nikesh Arora, C.F.A., serves as the Chairman and Chief Executive Officer of Palo Alto Networks, Inc. since joining it on June 06, 2018. Mr. Arora was an Advisor of SoftBank Group Corp. since July 1, 20...
CEO Compensation Analysis
Compensation vs Market: Nikesh's total compensation ($USD23.28M) is above average for companies of similar size in the US market ($USD11.42M).
Compensation vs Earnings: Nikesh's compensation has increased whilst the company is unprofitable.
Leadership Team
Experienced Management: PANW's management team is considered experienced (3.6 years average tenure).
Board Members
Experienced Board: PANW's board of directors are considered experienced (7.8 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Palo Alto Networks, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Palo Alto Networks, Inc.
- Ticker: PANW
- Exchange: NasdaqGS
- Founded: 2005
- Industry: Systems Software
- Sector: Software
- Implied Market Cap: US$47.718b
- Shares outstanding: 98.67m
- Website: https://www.paloaltonetworks.com
Number of Employees
Location
- Palo Alto Networks, Inc.
- 3000 Tannery Way
- Santa Clara
- California
- 95054
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/01/21 23:48 |
| End of Day Share Price | 2022/01/21 00:00 |
| Earnings | 2021/10/31 |
| Annual Earnings | 2021/07/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.