Palo Alto Networks logged a -0.0% change during today's afternoon session, and is now trading at a price of $263.94 per share.
Palo Alto Networks returned gains of 52.0% last year, with its stock price reaching a high of $268.1 and a low of $132.22. Over the same period, the stock outperformed the S&P 500 index by 38.0%. More recently, the company's 50-day average price was $245.11. Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. Based in Santa Clara, CA, the large-cap Technology company has 14,182 full time employees. Palo Alto Networks has not offered a dividend during the last year.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $2,273 | $2,900 | $3,408 | $4,256 | $5,502 | $6,893 |
| Gross Margins | 24.0% | 26.0% | 24.0% | 23.0% | 28.0% | 33.0% |
| Operating Margins | -5.0% | -2.0% | -5.0% | -7.0% | -3.0% | 8.0% |
| Net Margins | -5.0% | -3.0% | -8.0% | -12.0% | -5.0% | 6.0% |
| Net Income (MM) | -$122 | -$82 | -$267 | -$499 | -$267 | $440 |
| Net Interest Expense (MM) | $30 | $84 | $89 | $163 | $27 | $224 |
| Depreciation & Amort. (MM) | $96 | $154 | $206 | $260 | $283 | $282 |
| Free Cash Flow (MM) | $926 | $924 | $821 | $1,387 | $1,792 | $2,631 |
| Capital Expenditures (MM) | $112 | $131 | $214 | $116 | $193 | $146 |
| Net Current Assets (MM) | $659 | $143 | -$264 | -$4,801 | -$6,302 | -$6,705 |
| Long Term Debt (MM) | $1,384 | $1,446 | $3,119 | $0 | $255 | $221 |
| Net Debt / EBITDA | 32.92 | 1.82 | 36.06 | 35.88 | -19.32 | -1.08 |
Palo Alto Networks has growing revenues and increasing reinvestment in the business, a pattern of improving cash flows, and good track record of EPS growth. However, Palo Alto Networks has slimmer gross margins than its peers, consistently negative margins with a positive growth rate, and a highly leveraged balance sheet.
Palo Alto Networks's P/B and P/E Ratios Are Higher Than Average:
Palo Alto Networks has a trailing twelve month P/E ratio of 138.5, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $6.42, the company has a forward P/E ratio of 38.2. Palo Alto Networks's PEG ratio is 12.76 on the basis of the 10.9% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, Palo Alto Networks is likely overvalued compared to the book value of its equity, since its P/B ratio of 38.15 is higher than the sector average of 6.23. The company's shares are currently trading 1966.9% above their Graham number.
Analysts Give Palo Alto Networks an Average Rating of Buy:
The 41 analysts following Palo Alto Networks have set target prices ranging from $190.0 to $340.0 per share, for an average of $281.44 with a buy rating. As of April 2023, the company is trading -12.9% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Palo Alto Networks has an average amount of shares sold short because 5.9% of the company's shares are sold short. Institutions own 88.4% of the company's shares, and the insider ownership rate stands at 1.22%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 27% stake in the company is worth $6,997,506,608.
