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PANW

Palo Alto NetworksNasdaqGS:PANW Stock Report

Last Price

US$483.63

Market Cap

US$47.7b

7D

-3.1%

1Y

32.6%

Updated

21 Jan, 2022

Data

Company Financials +
PANW fundamental analysis
Snowflake Score
Valuation2/6
Future Growth5/6
Past Performance0/6
Financial Health3/6
Dividends0/6

PANW Stock Overview

Palo Alto Networks, Inc. provides cybersecurity solutions worldwide.

Rewards

Trading at 51.6% below our estimate of its fair value

Earnings are forecast to grow 43.62% per year

Risk Analysis

No risks detected for PANW from our risk checks.

Palo Alto Networks Competitors

VMware

NYSE:VMW

US$52.0b

Fortinet

NasdaqGS:FTNT

US$47.2b

CrowdStrike Holdings

NasdaqGS:CRWD

US$37.8b

Zscaler

NasdaqGS:ZS

US$33.9b

Price History & Performance

Summary of all time highs, changes and price drops for Palo Alto Networks
Historical stock prices
Current Share PriceUS$483.63
52 Week HighUS$572.67
52 Week LowUS$311.56
Beta1.36
1 Month Change-12.82%
3 Month Change-4.07%
1 Year Change32.64%
3 Year Change130.61%
5 Year Change233.12%
Change since IPO810.28%

Recent News & Updates

Jan 14

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.

Dec 29

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.

Nov 29
Palo Alto Networks (NASDAQ:PANW) Is Making Moderate Use Of Debt

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

PANWUS SoftwareUS Market
7D-3.1%-5.5%-6.1%
1Y32.6%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

Is PANW's price volatile compared to industry and market?
PANW volatility
PANW Average Weekly Movement5.4%
Software Industry Average Movement8.6%
Market Average Movement6.7%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.4%

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

FoundedEmployeesCEOWebsite
200511,098Nikesh Arorahttps://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

How do Palo Alto Networks's earnings and revenue compare to its market cap?
PANW fundamental statistics
Market CapUS$47.72b
Earnings (TTM)-US$510.30m
Revenue (TTM)US$4.56b

10.5x

P/S Ratio

-93.5x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PANW income statement (TTM)
RevenueUS$4.56b
Cost of RevenueUS$1.38b
Gross ProfitUS$3.18b
ExpensesUS$3.69b
Earnings-US$510.30m

Last Reported Earnings

Oct 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)-5.17
Gross Margin69.77%
Net Profit Margin-11.20%
Debt/Equity Ratio707.7%

How did PANW perform over the long term?

See historical performance and comparison

Valuation

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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/21 23:48
End of Day Share Price2022/01/21 00:00
Earnings2021/10/31
Annual Earnings2021/07/31


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.