Now trading at a price of $334.11, Palo Alto Networks has moved -2.7% so far today.
Palo Alto Networks returned gains of 38.7% last year, with its stock price reaching a high of $380.84 and a low of $224.64. Over the same period, the stock outperformed the S&P 500 index by 12.5%. More recently, the company's 50-day average price was $325.1. Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. Based in Santa Clara, CA, the Large-Cap Technology company has 15,166 full time employees. Palo Alto Networks has not offered a dividend during the last year.
Wider Gross Margins Than the Industry Average of 45.57%:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $1,402 | $2,900 | $3,408 | $4,256 | $5,502 | $6,893 |
| Gross Margins | n/a | 72.0% | 71.0% | 70.0% | 69.0% | 72.0% |
| Net Margins | -9% | -3% | -8% | -12% | -5% | 6% |
| Net Income (M) | -$122 | -$82 | -$267 | -$499 | -$267 | $440 |
| Net Interest Expense (M) | $30 | $84 | $89 | $163 | $27 | $27 |
| Depreciation & Amort. (M) | $96 | $154 | $206 | $260 | $283 | $282 |
| Diluted Shares (M) | 281 | 284 | 291 | 293 | 338 | 350 |
| Earnings Per Share | -$0.43 | -$0.29 | -$0.92 | -$1.7 | -$0.79 | $1.26 |
| EPS Growth | n/a | 32.56% | -217.24% | -84.78% | 53.53% | 259.49% |
| Avg. Price | $64.43 | $73.85 | $79.34 | $138.02 | $177.95 | $334.11 |
| P/E Ratio | -149.84 | -263.75 | -86.24 | -80.71 | -199.94 | 235.29 |
| Free Cash Flow (M) | $926 | $924 | $821 | $1,387 | $1,792 | $2,631 |
| CAPEX (M) | $112 | $131 | $214 | $116 | $193 | $146 |
| EV / EBITDA | -2375.06 | 217.2 | 882.5 | -954.95 | 584.82 | 153.26 |
| Total Debt (M) | $2,175 | $1,430 | $3,119 | $3,672 | $3,679 | $1,992 |
| Net Debt / EBITDA | -50.05 | 1.67 | 36.06 | -32.02 | 17.18 | -0.75 |
| Current Ratio | 2.1 | 1.78 | 1.63 | 0.68 | 0.7 | 0.86 |
Palo Alto Networks benefits from rapidly growing revenues and increasing reinvestment in the business, generally positive cash flows, and wider gross margins than its peer group. The company's financial statements show a strong EPS growth trend and healthy leverage levels. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.86.
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 47.0, compared to an average of 31.58 for the Technology sector. Based on its EPS guidance of $6.19, the company has a forward P/E ratio of 52.5. According to the 47.8% compound average growth rate of Palo Alto Networks's historical and projected earnings per share, the company's PEG ratio is 0.98. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 20.8%. On this basis, the company's PEG ratio is 2.26. This suggests that these shares are overvalued. Furthermore, Palo Alto Networks is likely overvalued compared to the book value of its equity, since its P/B ratio of 24.18 is higher than the sector average of 4.11. The company's shares are currently trading 2419.7% below their Graham number. Overall, Palo Alto Networks's lofty valuation in terms of earnings and assets is to some extent attenuated by its strong cash flow trend and reasonable levels of debt.
Palo Alto Networks Has an Average Rating of Buy:
The 46 analysts following Palo Alto Networks have set target prices ranging from $275.0 to $391.7 per share, for an average of $348.17 with a buy rating. The company is trading -4.0% 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 3.5% of the company's shares are sold short. Institutions own 80.9% of the company's shares, and the insider ownership rate stands at 1.02%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 30% stake in the company is worth $9,856,615,095.
