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 | 278.85 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) | 71.18% | -16.02% |
| Total Return (3Y, Annualized) | 41.06% | -0.06% |
| Total Return (5Y, Annualized) | 39.27% | -8.49% |
Risk Profile
Drawdown History
Return Distribution
Risk Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Volatility (1Y, Annualized) | 41.50% | 59.05% |
| Beta (5Y) | 0.91 | 1.12 |
| Max Drawdown (5Y) | -36.01% | -77.02% |
Risk-Adjusted Performance
Risk-Return Positioning
Risk-Adjusted Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Sharpe Ratio (1Y) | 1.62 | -0.37 |
| Sortino Ratio (1Y) | 2.45 | -0.54 |
Profitability
ROE (TTM)
Palo Alto Networks (PANW) posts ROE of 4.83%, 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
4.83%
Group distribution
- Max
- 53.38%
- Q3
- 16.62%
- Median
- 5.48%
- PANW
- 4.83%
- Q1
- -12.77%
- Min
- -55.27%
Largest peers
- ORCL
- 53.38%
- IBM
- 35.77%
- MSFT
- 34.01%
- PLTR
- 32.59%
- SAP
- 16.35%
- PANW
- 4.83%
- CRWD
- -0.25%
Net Margin (TTM)
Palo Alto Networks (PANW) keeps 7.95% 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
7.95%
Group distribution
- Max
- 44.20%
- Q3
- 15.06%
- PANW
- 7.95%
- Median
- 3.70%
- Q1
- -5.19%
- Min
- -34.99%
Largest peers
- PLTR
- 43.67%
- MSFT
- 39.34%
- ORCL
- 25.37%
- SAP
- 19.58%
- IBM
- 15.61%
- PANW
- 7.95%
- CRWD
- -0.60%
Operating Margin (TTM)
Palo Alto Networks (PANW) has negative operating margin of -2.47%. Core operations were loss-making before interest and taxes over the trailing period.
PANW
Software & Services industry group
-2.47%
Group distribution
- Max
- 46.97%
- Q3
- 16.51%
- Median
- 5.70%
- PANW
- -2.47%
- Q1
- -9.95%
- Min
- -43.35%
Largest peers
- MSFT
- 46.33%
- PLTR
- 46.18%
- ORCL
- 36.20%
- SAP
- 30.03%
- IBM
- 13.81%
- CRWD
- -2.21%
- PANW
- -2.47%
Profitability Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| ROE (TTM) | 4.83% | 5.48% |
| ROA (TTM) | 1.77% | 1.72% |
| Net Margin (TTM) | 7.95% | 3.70% |
| Operating Margin (TTM) | -2.47% | 5.70% |
| Gross Margin (TTM) | 71.96% | 69.39% |
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% | 14.27% |
| Revenue Growth (3Y CAGR) | 18.79% | 13.51% |
| EPS Growth (YoY) | -56.04% | 7.85% |
| EPS Growth (3Y CAGR) | -- | 18.25% |
Financial Strength
Current Ratio (MRQ)
Palo Alto Networks (PANW) has current ratio of 0.86, 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
0.86
Group distribution
- Max
- 5.55
- Q3
- 2.88
- Median
- 1.70
- Q1
- 1.06
- PANW
- 0.86
- Min
- 0.03
Largest peers
- PLTR
- 6.91
- CRWD
- 1.53
- MSFT
- 1.28
- ORCL
- 1.12
- SAP
- 1.07
- PANW
- 0.86
- IBM
- 0.80
Debt / Equity (MRQ)
Palo Alto Networks (PANW) has debt-to-equity ratio of 0.08, 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
0.08
Group distribution
- Max
- 2.62
- Q3
- 1.10
- Median
- 0.31
- PANW
- 0.08
- Q1
- 0.06
- Min
- 0.00
Largest peers
- ORCL
- 3.89
- IBM
- 2.11
- MSFT
- 0.30
- CRWD
- 0.18
- SAP
- 0.17
- PANW
- 0.08
- PLTR
- 0.02
Financial Strength Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Current Ratio (MRQ) | 0.86 | 1.70 |
| Debt / Equity (MRQ) | 0.08 | 0.31 |
| Net Debt / EBITDA | -0.66 | -0.10 |
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
- 3.15%
- ORCL
- 1.65%
- SAP
- 1.58%
- MSFT
- 0.88%
- 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
- 59.47%
- SAP
- 37.15%
- ORCL
- 34.31%
- MSFT
- 20.73%
- 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 302.79, 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
302.79
Group distribution
- PANW
- 302.79
- Max
- 122.10
- Q3
- 63.18
- Median
- 31.83
- Q1
- 16.77
- Min
- 0.43
Largest peers
- PANW
- 302.79
- PLTR
- 150.75
- MSFT
- 23.70
- SAP
- 22.27
- ORCL
- 20.83
- IBM
- 18.83
- CRWD
- --
P/S Ratio (TTM)
Palo Alto Networks (PANW) trades at 26.29 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
26.29
Group distribution
- PANW
- 26.29
- Max
- 18.71
- Q3
- 8.98
- Median
- 4.08
- Q1
- 2.15
- Min
- 0.02
Largest peers
- PLTR
- 60.88
- CRWD
- 38.21
- PANW
- 26.29
- MSFT
- 9.28
- ORCL
- 5.43
- SAP
- 4.87
- IBM
- 2.87
P/B Ratio (MRQ)
Palo Alto Networks (PANW) trades at 10.05 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
10.05
Group distribution
- Max
- 16.97
- PANW
- 10.05
- Q3
- 8.89
- Median
- 4.00
- Q1
- 1.93
- Min
- -8.32
Largest peers
- CRWD
- 42.00
- PLTR
- 37.63
- PANW
- 10.05
- ORCL
- 9.74
- MSFT
- 7.13
- IBM
- 6.00
- SAP
- 3.45
Valuation Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| P/E Ratio (TTM) | 302.79 | 31.83 |
| P/S Ratio (TTM) | 26.29 | 4.08 |
| P/B Ratio (MRQ) | 10.05 | 4.00 |
| Free Cash Flow Yield (TTM) | 1.28% | 4.41% |