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 | 311.29 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) | 76.98% | -6.63% |
| Total Return (3Y, Annualized) | 45.68% | 11.46% |
| Total Return (5Y, Annualized) | 35.27% | -6.63% |
Risk Profile
Drawdown History
Return Distribution
Risk Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Volatility (1Y, Annualized) | 49.64% | 61.15% |
| Beta (5Y) | 0.95 | 1.09 |
| Max Drawdown (5Y) | -36.01% | -76.52% |
Risk-Adjusted Performance
Risk-Return Positioning
Risk-Adjusted Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Sharpe Ratio (1Y) | 1.46 | -0.22 |
| Sortino Ratio (1Y) | 2.33 | -0.33 |
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
- 53.85%
- Q3
- 18.22%
- Median
- 6.15%
- PANW
- 1.74%
- Q1
- -10.59%
- Min
- -52.18%
Largest peers
- ORCL
- 41.19%
- PLTR
- 38.10%
- IBM
- 34.77%
- MSFT
- 34.04%
- SAP
- 18.18%
- 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
- 15.53%
- Median
- 4.63%
- PANW
- 2.67%
- Q1
- -5.46%
- Min
- -30.95%
Largest peers
- PLTR
- 49.01%
- MSFT
- 40.31%
- ORCL
- 26.36%
- SAP
- 20.41%
- IBM
- 15.99%
- PANW
- 2.67%
- CRWD
- 0.83%
Operating Margin (TTM)
Palo Alto Networks (PANW) turns 5.40% 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
5.40%
Group distribution
- Max
- 47.12%
- Q3
- 16.11%
- PANW
- 5.40%
- Median
- 5.30%
- Q1
- -5.81%
- Min
- -34.92%
Largest peers
- PLTR
- 47.12%
- MSFT
- 45.11%
- ORCL
- 35.63%
- SAP
- 29.50%
- IBM
- 16.97%
- PANW
- 5.40%
- CRWD
- -2.26%
Profitability Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| ROE (TTM) | 1.74% | 6.15% |
| ROA (TTM) | 1.40% | 2.14% |
| Net Margin (TTM) | 2.67% | 4.63% |
| Operating Margin (TTM) | 5.40% | 5.30% |
| Gross Margin (TTM) | 70.38% | 69.67% |
Growth
Revenue Growth
Palo Alto Networks (PANW) grew revenue 24.50%, 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 -75.00%, 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) | 24.50% | 14.22% |
| Revenue Growth (3Y CAGR) | 18.54% | 13.52% |
| EPS Growth (YoY) | -75.00% | 7.79% |
| EPS Growth (3Y CAGR) | -14.50% | 18.19% |
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
- 5.11
- Q3
- 2.74
- Median
- 1.62
- Q1
- 1.01
- PANW
- 0.87
- Min
- 0.03
Largest peers
- PLTR
- 7.23
- CRWD
- 1.57
- MSFT
- 1.23
- ORCL
- 1.17
- SAP
- 1.16
- PANW
- 0.87
- IBM
- 0.86
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
- 2.52
- Q3
- 1.15
- Median
- 0.39
- PANW
- 0.09
- Q1
- 0.06
- Min
- 0.00
Largest peers
- ORCL
- 2.52
- IBM
- 1.85
- MSFT
- 0.29
- SAP
- 0.23
- CRWD
- 0.16
- PANW
- 0.09
- PLTR
- 0.02
Financial Strength Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| Current Ratio (MRQ) | 0.87 | 1.62 |
| Debt / Equity (MRQ) | 0.09 | 0.39 |
| Net Debt / EBITDA | -0.32 | 0.09 |
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
- 2.67%
- ORCL
- 1.59%
- SAP
- 1.04%
- MSFT
- 0.70%
- 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
- 57.51%
- SAP
- 36.45%
- ORCL
- 31.35%
- 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 951.37, 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
951.37
Group distribution
- PANW
- 951.37
- Max
- 124.02
- Q3
- 61.05
- Median
- 32.71
- Q1
- 18.80
- Min
- 7.09
Largest peers
- CRWD
- 4,292.83
- PANW
- 951.37
- PLTR
- 174.12
- SAP
- 29.66
- MSFT
- 29.22
- IBM
- 21.63
- ORCL
- 19.77
P/S Ratio (TTM)
Palo Alto Networks (PANW) trades at 27.12 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
27.12
Group distribution
- PANW
- 27.12
- Max
- 17.89
- Q3
- 9.22
- Median
- 4.67
- Q1
- 2.41
- Min
- 0.02
Largest peers
- PLTR
- 76.80
- CRWD
- 48.87
- PANW
- 27.12
- MSFT
- 11.74
- SAP
- 6.98
- ORCL
- 5.33
- IBM
- 3.43
P/B Ratio (MRQ)
Palo Alto Networks (PANW) trades at 11.28 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
11.28
Group distribution
- Max
- 21.76
- PANW
- 11.28
- Q3
- 10.03
- Median
- 4.84
- Q1
- 2.03
- Min
- -4.30
Largest peers
- SAP
- 74.72
- CRWD
- 51.69
- PLTR
- 48.37
- PANW
- 11.28
- MSFT
- 8.81
- IBM
- 6.74
- ORCL
- 6.17
Valuation Metrics
| Metric | Current stock: PANW | Industry group median |
|---|---|---|
| P/E Ratio (TTM) | 951.37 | 32.71 |
| P/S Ratio (TTM) | 27.12 | 4.67 |
| P/B Ratio (MRQ) | 11.28 | 4.84 |
| Free Cash Flow Yield (TTM) | 1.36% | 3.67% |