Palo Alto Networks (PANW) Stock Analysis
This is a peer-relative look at Palo Alto Networks (PANW): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Software & Services peers, so every number reads in context rather than in isolation.
Company Profile
| Profile Item | PANW |
|---|---|
| Name | Palo Alto Networks Inc. |
| Country/Region | United States |
| GICS Sector | Information Technology |
| GICS Industry Group | Software & Services |
| GICS Industry | Software |
| GICS Sub-Industry | Systems Software |
| Market Capitalization | 271.61 billion USD |
| Currency | USD |
| Exchange | Nasdaq |
| Listing Date | July 20, 2012 |
| Security Type | Common Stock |
Price Performance
Cumulative Growth
Trailing Returns
Calendar-Year Returns
Performance Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Total Return (1Y) | 73.26% | -3.78% |
| Total Return (3Y, Annualized) | 40.03% | 4.13% |
| Total Return (5Y, Annualized) | 33.69% | -7.93% |
Risk Profile
Drawdown History
Return Distribution
Risk Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Volatility (1Y, Annualized) | 45.20% | 61.43% |
| Beta (5Y) | 0.94 | 1.13 |
| Max Drawdown (5Y) | -36.01% | -76.82% |
Risk-Adjusted Performance
Risk-Return Positioning
Risk-Adjusted Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Sharpe Ratio (1Y) | 1.53 | -0.15 |
| Sortino Ratio (1Y) | 2.38 | -0.22 |
Profitability
ROE (TTM)
Palo Alto Networks (PANW) posts ROE of 1.74%, roughly around the peer group’s normal range. Shareholders’ equity is producing a return that looks broadly typical for the industry.
PANW
Software & Services industry group
1.74%
Group distribution
- Max
- 62.95%
- Q3
- 18.06%
- Median
- 5.27%
- PANW
- 1.74%
- Q1
- -14.02%
- Min
- -59.77%
Largest peers
- ORCL
- 53.38%
- PLTR
- 38.10%
- IBM
- 34.46%
- MSFT
- 34.04%
- SAP
- 18.32%
- PANW
- 1.74%
- CRWD
- 1.46%
Net Margin (TTM)
Palo Alto Networks (PANW) keeps 2.67% of revenue as net profit, roughly in line with the peer group’s normal net margin range. Its full cost stack is taking a typical share of sales for the industry.
PANW
Software & Services industry group
2.67%
Group distribution
- Max
- 41.43%
- Q3
- 14.96%
- Median
- 3.57%
- PANW
- 2.67%
- Q1
- -6.01%
- Min
- -35.38%
Largest peers
- PLTR
- 49.01%
- MSFT
- 40.31%
- ORCL
- 25.37%
- SAP
- 20.41%
- IBM
- 15.52%
- PANW
- 2.67%
- CRWD
- 0.83%
Operating Margin (TTM)
Palo Alto Networks (PANW) turns 5.04% of revenue into operating profit, roughly in line with the peer group’s normal operating margin range. Its core cost structure looks typical for the industry.
PANW
Software & Services industry group
5.04%
Group distribution
- Max
- 47.12%
- Q3
- 15.43%
- PANW
- 5.04%
- Median
- 4.85%
- Q1
- -7.31%
- Min
- -39.13%
Largest peers
- PLTR
- 47.12%
- MSFT
- 45.11%
- ORCL
- 36.20%
- SAP
- 27.62%
- IBM
- 16.55%
- PANW
- 5.04%
- CRWD
- -2.26%
Profitability Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| ROE (TTM) | 1.74% | 5.27% |
| ROA (TTM) | 1.75% | 1.99% |
| Net Margin (TTM) | 2.67% | 3.57% |
| Operating Margin (TTM) | 5.04% | 4.85% |
| Gross Margin (TTM) | 70.49% | 68.92% |
Growth
Revenue Growth
Palo Alto Networks (PANW) grew revenue 14.87%, roughly around the peer group's normal range. Top-line momentum looks broadly typical for the industry.
EPS Growth
Palo Alto Networks (PANW) grew earnings per share -56.04%, in the lower peer quartile. Per-share profits are advancing more slowly than at most peers, so margins, costs, or share count deserve a closer look.
Growth Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Revenue Growth (YoY) | 14.87% | 14.65% |
| Revenue Growth (3Y CAGR) | 18.79% | 13.51% |
| EPS Growth (YoY) | -56.04% | 7.42% |
| EPS Growth (3Y CAGR) | -- | 18.42% |
Financial Strength
Current Ratio (MRQ)
Palo Alto Networks (PANW) has current ratio of 0.87, in the tighter-liquidity quartile for its industry. The short-term cushion is thinner than most peers carry, even if the absolute comfort level still depends on the business model.
PANW
Software & Services industry group
0.87
Group distribution
- Max
- 5.39
- Q3
- 2.83
- Median
- 1.63
- Q1
- 1.01
- PANW
- 0.87
- Min
- 0.03
Largest peers
- PLTR
- 7.23
- CRWD
- 1.57
- MSFT
- 1.23
- SAP
- 1.15
- ORCL
- 1.12
- PANW
- 0.87
- IBM
- 0.79
Debt / Equity (MRQ)
Palo Alto Networks (PANW) has debt-to-equity ratio of 0.09, roughly in line with the peer group’s normal leverage range. Its mix of debt and equity looks typical for the industry.
PANW
Software & Services industry group
0.09
Group distribution
- Max
- 2.62
- Q3
- 1.10
- Median
- 0.35
- PANW
- 0.09
- Q1
- 0.06
- Min
- 0.00
Largest peers
- ORCL
- 3.89
- IBM
- 1.89
- MSFT
- 0.29
- SAP
- 0.22
- CRWD
- 0.16
- PANW
- 0.09
- PLTR
- 0.02
Financial Strength Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Current Ratio (MRQ) | 0.87 | 1.63 |
| Debt / Equity (MRQ) | 0.09 | 0.35 |
| Net Debt / EBITDA | -0.31 | -0.03 |
Dividends
Dividend Yield (TTM)
Palo Alto Networks (PANW) pays no dividend, leaving dividend yield at 0.00% this period. Shareholders may still receive value through reinvestment or buybacks, but there is no dividend income to compare here.
PANW
Software & Services industry group
0.00%
Group distribution
- PANW
- 0.00%
- Max
- 0.00%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
Largest peers
- IBM
- 2.87%
- ORCL
- 1.30%
- SAP
- 1.15%
- MSFT
- 0.71%
- PANW
- 0.00%
- PLTR
- 0.00%
- CRWD
- 0.00%
Dividend Payout Ratio (TTM)
Palo Alto Networks (PANW) paid no earnings out as dividends this period, leaving payout ratio at 0.00%. There is no dividend payout to size against earnings.
PANW
Software & Services industry group
0.00%
Group distribution
- PANW
- 0.00%
- Max
- 0.00%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
Largest peers
- IBM
- 59.77%
- SAP
- 37.53%
- ORCL
- 34.31%
- MSFT
- 19.83%
- PANW
- 0.00%
- PLTR
- 0.00%
- CRWD
- 0.00%
Dividend Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 0.00% |
| Dividend Payout Ratio (TTM) | 0.00% | 0.00% |
Valuation
P/E Ratio (TTM)
Palo Alto Networks (PANW) trades at P/E ratio of 284.84, above the peer range for its industry. The market is paying unusually heavily for TTM earnings relative to comparable companies.
PANW
Software & Services industry group
284.84
Group distribution
- PANW
- 284.84
- Max
- 107.29
- Q3
- 58.41
- Median
- 31.75
- Q1
- 16.98
- Min
- 0.36
Largest peers
- CRWD
- 5,327.50
- PANW
- 284.84
- PLTR
- 149.00
- MSFT
- 27.85
- SAP
- 27.79
- ORCL
- 27.23
- IBM
- 20.88
P/S Ratio (TTM)
Palo Alto Networks (PANW) trades at 23.66 on P/S ratio, above the industry benchmark range. The stock is being valued at an unusually rich price per dollar of trailing revenue.
PANW
Software & Services industry group
23.66
Group distribution
- PANW
- 23.66
- Max
- 20.34
- Q3
- 9.61
- Median
- 4.72
- Q1
- 2.37
- Min
- 0.02
Largest peers
- PLTR
- 68.05
- CRWD
- 40.44
- PANW
- 23.66
- MSFT
- 11.18
- ORCL
- 6.79
- SAP
- 6.50
- IBM
- 3.20
P/B Ratio (MRQ)
Palo Alto Networks (PANW) trades at 9.79 on P/B ratio, in the higher book-value quartile. The market is paying a premium to book, so stronger ROE, cleaner assets, or a better growth profile need to justify it.
PANW
Software & Services industry group
9.79
Group distribution
- Max
- 19.49
- PANW
- 9.79
- Q3
- 9.71
- Median
- 4.50
- Q1
- 2.11
- Min
- -4.91
Largest peers
- SAP
- 67.70
- PLTR
- 42.85
- CRWD
- 42.77
- ORCL
- 12.18
- PANW
- 9.79
- MSFT
- 8.39
- IBM
- 6.42
Valuation Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| P/E Ratio (TTM) | 284.84 | 31.75 |
| P/S Ratio (TTM) | 23.66 | 4.72 |
| P/B Ratio (MRQ) | 9.79 | 4.50 |
| Free Cash Flow Yield (TTM) | 1.65% | 3.91% |