PANW Stock Overview
Palo Alto Networks, Inc. provides cybersecurity solutions worldwide.
Palo Alto Networks Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$165.58|
|52 Week High||US$213.63|
|52 Week Low||US$140.52|
|1 Month Change||-11.25%|
|3 Month Change||-2.27%|
|1 Year Change||3.70%|
|3 Year Change||138.29%|
|5 Year Change||241.40%|
|Change since IPO||834.95%|
Recent News & Updates
Quick Takes: Palo Alto, Alphabet, Meta & More
Vladimr Putin’s latest mobilization caused the oil price to spike yesterday morning. Somewhat predictably, energy stocks opened higher, - but then very quickly reversed course, along with the price of crude, when it emerged that US inventories increased by 1.1 million barrels from a week earlier. Exxon (NYSE: XOM), Chevron (NYSE: CVX) and Occidental Petroleum (NYSE: OXY) all closed lower on the day.
Palo Alto Networks' (NASDAQ: PANW) Stock Split Makes Sense when you look at the the Current Shareholder Base
Palo Alto Networks (NASDAQ: PANW) will be conducting a 3-for-1 stock split after the market closes on Tuesday 13th September. On Wednesday, shareholders will receive two additional shares for each share they hold at the close on Tuesday. With a pre-split share price of ~$570, shares should be trading at ~$190 after the split. The number of shares outstanding will increase from ~99.4 million to ~299 million.
Is Palo Alto Networks Stock A Buy Or Sell After 3-For-1 Stock Split Announcement?
Summary Palo Alto will quietly execute a stock split this week. This is good news to know, but other information is more vital. Let's take a look at the future of Palo Alto, the potential for shareholder profits, and key performance indicators. When Is Palo Alto Conducting A Stock Split? Let's begin with some news you can use and then get down to the serious business: Palo Alto Networks (NASDAQ:PANW) will execute a 3:1 stock split Tuesday, September 13th, 2022. Investors will receive two additional shares for each one owned, and the stock will begin trading "split-adjusted" on September 14th. Based on Friday's close price, the stock will trade for about $188 per share. The stock has been buoyed lately by its quality earnings reports, followed by CrowdStrike's (CRWD) impressive report, which I covered here, and Zscaler's (ZS) equally fantastic earnings, as shown below. PANW data by YCharts Palo Alto and CrowdStrike have trounced the Nasdaq this year, although only Palo Alto is up year-to-date (YTD). Palo Alto reported earnings for Q4 and full-year fiscal 2022 on August 22, and the results were sneakily fantastic. The repeated outperformance explains how the stock has bested the Nasdaq by over 20% YTD and 40% over the last year, as shown below. PANW Total Return Level data by YCharts The string of impressive earnings reports illustrates the strength of the entire cybersecurity market. The market is thriving, and needs are increasing. Attacks are so commonplace that they barely register as headlines these days, but they are top of mind for IT departments and C-suite executives. Last week, the Los Angeles Unified School District and the parent company of Holiday Inn and Regent hotels, InterContinental Hotels Group (IHG), were hit. Both caused disruption, but were not catastrophic. The cybersecurity industry is expected to grow at a compounded annual rate of over 13% through at least 2027 (and likely well beyond) because of the constant vigilance that companies and governments need. Are Stock Splits Good For Shareholders? Stock splits matter very little to a stock's performance in the long run. However, here are a couple of positive effects: Splits keep shares more affordable and accessible to smaller investors and the company's employees. The bid-ask spread is lowered due to increased liquidity. It's a great time to take a deeper look at the company, how it grew the share price, and where it is headed. What Is The Future Of PANW Stock? Now that the housekeeping is out of the way, let's get down to the meat and potatoes. About four years ago, Palo Alto began transforming from a hardware company to a software company. At that time, its next-generation security (NGS) was less than 10% of its total billings. NGS now makes up 38% of billings, and the Prisma Cloud platform is an industry leader. Subscription and support now make up 80% of Palo Alto's billings. Subscription revenues are critical as they are (1) recurring and (2) predictable. The best companies on the planet, like Microsoft (MSFT), have successfully transitioned to a subscription model in recent years. The future for Palo Alto is in cloud-based comprehensive security solutions that support customer security needs end-to-end. Palo Alto is highly respected and trusted in the industry and reported some significant wins in Q4 FY22: While we've had many large customer wins recently, I want to highlight a team in three transactions. The first is a technology company that purchased products in all three of our platforms and a transaction over $75 million in value. The second is a financial services company that standardized its network security in our platform, including adding VMs and deploying Prisma Cloud, spending north of $40 million. And third is a professional services company that spent over $75 million across Strata, Prisma and Cortex. - Nikesh Arora - Chairman and CEO of Palo Alto Networks PANW Stock Key Metrics There are several performance indicators that investors should watch with Palo Alto: Growth in next-gen security annual recurring revenue (NGS ARR). Subscription products mix Free cash flow (FCF) and FCF margin. Balance sheet strength Growth in Next-Gen Security ARR The revenue recurring annually from next-gen security is an excellent way to measure Palo Alto's performance, as this is the key to its future success. The company posted 60% year-over-year growth in this category in fiscal 2022. As the CEO mentioned on the earnings call, this segment rivals the subscription growth rates of the up-and-comers like CrowdStrike and Zscaler. Data source: Palo Alto. Chart by author. Total revenue grew 29% in FY22 to reach $5.5 billion. Billings took a 44% jump in Q4 which means the strong growth should continue. Subscription product mix Investors should watch closely to ensure that management successfully grows recurring revenues as a percentage of total sales. The company's future is away from products, although product sales are rising and provide a nice bonus. The company continues to move in the right direction, as shown below. Data source: Palo Alto. Chart by author. Free cash flow and margin Free cash flow is one of the best ways to judge a growing software company. Suppose you look for GAAP earnings and traditional price-to-earnings (P/E) ratios seen in legacy industrial companies. In that case, Palo Alto and most of the cybersecurity industry are probably unsuitable for your portfolio. And that's ok.
|PANW||US Software||US Market|
Return vs Industry: PANW exceeded the US Software industry which returned -30% over the past year.
Return vs Market: PANW exceeded the US Market which returned -20.3% over the past year.
|PANW Average Weekly Movement||6.1%|
|Software Industry Average Movement||8.9%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: PANW is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: PANW's weekly volatility (6%) has been stable over the past year.
About the Company
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 a customer’s network, as well as their 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, URL 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|
Is PANW overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|PANW income statement (TTM)|
|Cost of Revenue||US$1.72b|
Last Reported Earnings
Jul 31, 2022
Next Earnings Date
|Earnings per share (EPS)||-0.89|
|Net Profit Margin||-4.85%|
How did PANW perform over the long term?See historical performance and comparison
Is PANW undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for PANW?
Other financial metrics that can be useful for relative valuation.
|What is PANW's n/a Ratio?|
Price to Sales Ratio vs Peers
How does PANW's PS Ratio compare to its peers?
|PANW PS Ratio vs Peers|
|Company||PS||Estimated Growth||Market Cap|
CRWD CrowdStrike Holdings
PANW Palo Alto Networks
Price-To-Sales vs Peers: PANW is good value based on its Price-To-Sales Ratio (9x) compared to the peer average (11.6x).
Price to Earnings Ratio vs Industry
How does PANW's PE Ratio compare vs other companies in the US Software Industry?
Price-To-Sales vs Industry: PANW is expensive based on its Price-To-Sales Ratio (9x) compared to the US Software industry average (4.4x)
Price to Sales Ratio vs Fair Ratio
What is PANW's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PS Ratio||9x|
|Fair PS Ratio||12.5x|
Price-To-Sales vs Fair Ratio: PANW is good value based on its Price-To-Sales Ratio (9x) compared to the estimated Fair Price-To-Sales Ratio (12.5x).
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 ($501.37) is trading below our estimate of fair value ($1261.52)
Significantly Below Fair Value: PANW is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Palo Alto Networks forecast to perform in the next 1 to 3 years based on estimates from 35 analysts?
Future Growth Score5/6
Future Growth Score 5/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
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 (1.9%).
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 is expected to become profitable in the next 3 years.
Revenue vs Market: PANW's revenue (16% per year) is forecast to grow faster than the US market (7.7% per year).
High Growth Revenue: PANW's revenue (16% 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 (41.4%).
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How has Palo Alto Networks performed over the past 5 years?
Past Performance Score0/6
Past Performance Score 0/6
Growing Profit Margin
Earnings vs Industry
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 27.4% 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 (14.5%).
Return on Equity
High ROE: PANW has a negative Return on Equity (-127.14%), as it is currently unprofitable.
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How is Palo Alto Networks's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: PANW's short term assets ($6.4B) do not cover its short term liabilities ($8.3B).
Long Term Liabilities: PANW's short term assets ($6.4B) exceed its long term liabilities ($3.7B).
Debt to Equity History and Analysis
Debt Level: PANW's net debt to equity ratio (20.1%) is considered satisfactory.
Reducing Debt: PANW's debt to equity ratio has increased from 69.2% to 1750.9% over the past 5 years.
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 16.1% per year.
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What is Palo Alto Networks's current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Palo Alto Networks Dividend Yield vs Market|
|Company (Palo Alto Networks)||n/a|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Software)||1.1%|
|Analyst forecast in 3 Years (Palo Alto Networks)||0%|
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.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as PANW has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Nikesh Arora (54 yo)
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
|Nikesh Arora's Compensation vs Palo Alto Networks Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jul 31 2022||n/a||n/a|
|Apr 30 2022||n/a||n/a|
|Jan 31 2022||n/a||n/a|
|Oct 31 2021||n/a||n/a|
|Jul 31 2021||US$23m||US$333k|
|Apr 30 2021||n/a||n/a|
|Jan 31 2021||n/a||n/a|
|Oct 31 2020||n/a||n/a|
|Jul 31 2020||US$2m||US$667k|
|Apr 30 2020||n/a||n/a|
|Jan 31 2020||n/a||n/a|
|Oct 31 2019||n/a||n/a|
|Jul 31 2019||US$24m||US$1m|
|Apr 30 2019||n/a||n/a|
|Jan 31 2019||n/a||n/a|
|Oct 31 2018||n/a||n/a|
|Jul 31 2018||US$126m||US$156k|
Compensation vs Market: Nikesh's total compensation ($USD23.28M) is above average for companies of similar size in the US market ($USD13.03M).
Compensation vs Earnings: Nikesh's compensation has increased whilst the company is unprofitable.
Experienced Management: PANW's management team is considered experienced (3 years average tenure).
Experienced Board: PANW's board of directors are considered experienced (8.4 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: PANW insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|24 Aug 22||SellUS$134,401||Aparna Bawa||Individual||711||US$190.33|
|25 May 22||SellUS$476,987||Aparna Bawa||Individual||2,853||US$167.19|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||128,100||0.04%|
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.4%.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Palo Alto Networks, Inc.'s employee growth, exchange listings and data sources
- Name: Palo Alto Networks, Inc.
- Ticker: PANW
- Exchange: NasdaqGS
- Founded: 2005
- Industry: Systems Software
- Sector: Software
- Implied Market Cap: US$49.544b
- Shares outstanding: 299.21m
- Website: https://www.paloaltonetworks.com
Number of Employees
- Palo Alto Networks, Inc.
- 3000 Tannery Way
- Santa Clara
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|PANW||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Jul 2012|
|5AP||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Jul 2012|
|5AP||XTRA (XETRA Trading Platform)||Yes||Common Stock||DE||EUR||Jul 2012|
|0KF5||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Jul 2012|
|PANW *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Jul 2012|
|P2AN34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 60 REPR 1 COM||BR||BRL||Jan 2022|
|PANWD||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 50 REP 1 COM||AR||USD||Jul 2022|
|PANW||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 50 REP 1 COM||AR||ARS||Jul 2022|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/29 00:00|
|End of Day Share Price||2022/09/29 00:00|
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.