NYSE:PANW

Stock Analysis Report

Executive Summary

Palo Alto Networks, Inc. provides security platform solutions worldwide.

Snowflake

Fundamentals

Excellent balance sheet with high growth potential.


Similar Companies

Share Price & News

How has Palo Alto Networks's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.4%

PANW

-3.0%

US Software

0.4%

US Market


1 Year Return

13.9%

PANW

23.8%

US Software

11.4%

US Market

Return vs Industry: PANW underperformed the US Software industry which returned 23.8% over the past year.

Return vs Market: PANW exceeded the US Market which returned 11.4% over the past year.


Shareholder returns

PANWIndustryMarket
7 Day1.4%-3.0%0.4%
30 Day4.7%-3.1%0.3%
90 Day-4.3%-9.0%-1.2%
1 Year13.9%13.9%25.6%23.8%13.9%11.4%
3 Year45.1%45.1%110.3%101.8%47.2%37.6%
5 Year107.0%107.0%159.3%140.5%62.4%44.6%

Price Volatility Vs. Market

How volatile is Palo Alto Networks's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Palo Alto Networks undervalued compared to its fair value and its price relative to the market?

17.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PANW ($217.2) is trading below our estimate of fair value ($262.98)

Significantly Below Fair Value: PANW is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PANW is unprofitable, so we can't compare its PE Ratio to the 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 (13.3x) compared to the US Software industry average (5.2x).


Next Steps

Future Growth

How is Palo Alto Networks forecast to perform in the next 1 to 3 years based on estimates from 35 analysts?

58.6%

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 (2.7%).

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 (14.6% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: PANW's revenue (14.6% 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 high in 3 years time (23.9%)


Next Steps

Past Performance

How has Palo Alto Networks performed over the past 5 years?

13.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: PANW is unprofitable, but has reduced losses over the past 5 years at a rate of 13% 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 (23%).


Return on Equity

High ROE: PANW has a negative Return on Equity (-5.16%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: PANW is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: PANW is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Palo Alto Networks's financial position?


Financial Position Analysis

Short Term Liabilities: PANW's short term assets ($3.7B) exceeds its short term liabilities ($2.1B)

Long Term Liabilities: PANW's short term assets (3.7B) exceeds its long term liabilities (3.0B)


Debt to Equity History and Analysis

Debt Level: PANW's debt to equity ratio (90.1%) is considered high

Reducing Debt: PANW's debt to equity ratio has reduced from 99.6% to 90.1% over the past 5 years.


Balance Sheet

Inventory Level: PANW has a low level of unsold assets or inventory.

Debt Coverage by Assets: PANW's debt is covered by short term assets (assets are 2.6x debt).


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 16.6% per year.


Next Steps

Dividend

What is Palo Alto Networks's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate PANW's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PANW's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

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

What is the CEO of Palo Alto Networks's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Nikesh Arora (51yo)

1.3yrs

Tenure

US$125,951,573

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, 201 ...


CEO Compensation Analysis

Compensation vs. Market: Nikesh has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

Compensation vs Earnings: Insufficient data to compare Nikesh's compensation with company performance.


Management Age and Tenure

2.0yrs

Average Tenure

51yo

Average Age

Experienced Management: PANW's management team is considered experienced (2 years average tenure).


Board Age and Tenure

6.8yrs

Average Tenure

53yo

Average Age

Experienced Board: PANW's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$300,04609 Apr 19
Jean Compeau
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer
Shares1,258
Max PriceUS$238.51
SellUS$9,708,05926 Mar 19
James Goetz
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares40,000
Max PriceUS$243.23
SellUS$400,36005 Mar 19
Jean Compeau
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer
Shares1,701
Max PriceUS$235.37
SellUS$818,83204 Mar 19
Carl Eschenbach
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,385
Max PriceUS$241.90

Ownership Breakdown


Management Team

  • Nir Zuk (47yo)

    Co-Founder

    • Tenure: 14.6yrs
    • Compensation: US$4.29m
  • Rajiv Batra (58yo)

    • Tenure: 14.8yrs
    • Compensation: US$980.15k
  • Nikesh Arora (51yo)

    CEO & Chairman

    • Tenure: 1.3yrs
    • Compensation: US$125.95m
  • René Bonvanie (57yo)

    Executive Vice President of Strategic Accounts

    • Tenure: 0.2yrs
    • Compensation: US$5.85m
  • Yuming Mao

    Co-Founder & Chief Architect

    • Tenure: 14.8yrs
  • Lee Klarich (44yo)

    Executive VP & Chief Product Officer

    • Tenure: 2.2yrs
    • Compensation: US$9.26m
  • Naveen Zutshi

    Senior VP & Chief Information Officer

    • Tenure: 3.8yrs
  • Kathy Bonanno (57yo)

    Executive VP & CFO

    • Tenure: 1.9yrs
    • Compensation: US$4.27m
  • Jean Compeau (49yo)

    Chief Accounting Officer

    • Tenure: 1.7yrs
  • Amit Singh (51yo)

    President

    • Tenure: 0.9yrs

Board Members

  • Jim Goetz (53yo)

    Independent Director

    • Tenure: 14.5yrs
  • Dan Warmenhoven (68yo)

    Lead Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$380.16k
  • Nir Zuk (47yo)

    Co-Founder

    • Tenure: 14.6yrs
    • Compensation: US$4.29m
  • Asheem Chandna (54yo)

    Independent Director

    • Tenure: 14.5yrs
    • Compensation: US$335.12k
  • Nikesh Arora (51yo)

    CEO & Chairman

    • Tenure: 1.3yrs
    • Compensation: US$125.95m
  • Mark McLaughlin (53yo)

    Vice Chairman

    • Tenure: 1.3yrs
    • Compensation: US$14.36m
  • John Donovan (59yo)

    Independent Director

    • Tenure: 7.1yrs
    • Compensation: US$320.30k
  • Carl Eschenbach (52yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$325.19k
  • Rhett Hernandez

    Member of Public Sector Advisory Council

    • Tenure: 4.7yrs
  • Bruce McConnell

    Member of Public Sector Advisory Council

    • Tenure: 4.7yrs

Company Information

Palo Alto Networks, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Palo Alto Networks, Inc.
  • Ticker: PANW
  • Exchange: NYSE
  • Founded: 2005
  • Industry: Systems Software
  • Sector: Software
  • Market Cap: US$21.066b
  • Shares outstanding: 96.99m
  • Website: https://www.paloaltonetworks.com

Number of Employees


Location

  • Palo Alto Networks, Inc.
  • 3000 Tannery Way
  • Santa Clara
  • California
  • 95054
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PANWNYSE (New York Stock Exchange)YesCommon StockUSUSDJul 2012
5APDB (Deutsche Boerse AG)YesCommon StockDEEURJul 2012
0KF5LSE (London Stock Exchange)YesCommon StockGBUSDJul 2012

Biography

Palo Alto Networks, Inc. provides security platform solutions worldwide. The company provides firewall appliances and software; Panorama, a security management solution for the control of appliances deploy ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/24 00:33
End of Day Share Price2019/10/23 00:00
Earnings2019/07/31
Annual Earnings2019/07/31


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.