Now trading at a price of $181.15, Palo Alto Networks has moved -1.1% so far today.
Palo Alto Networks returned gains of 26.6% last year, with its stock price reaching a high of $207.24 and a low of $130.04. Over the same period, the stock outperformed the S&P 500 index by 1.8%. More recently, the company's 50-day average price was $191.43. Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. Based in Santa Clara, CA, the Large-Cap Technology company has 15,289 full time employees. Palo Alto Networks has not offered a dividend during the last year.
Wider Gross Margins Than the Industry Average of 45.53%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $2,900 | $3,408 | $4,256 | $5,502 | $6,893 | $8,028 |
| Gross Margins | 72% | 71% | 70% | 69% | 72% | 74% |
| Net Margins | -3% | -8% | -12% | -5% | 6% | 32% |
| Net Income (M) | -$82 | -$267 | -$499 | -$267 | $440 | $2,578 |
| Net Interest Expense (M) | $84 | $89 | $163 | $27 | $27 | $8 |
| Depreciation & Amort. (M) | $154 | $206 | $260 | $283 | $282 | $283 |
| Diluted Shares (M) | 284 | 291 | 293 | 338 | 350 | 354 |
| Earnings Per Share | -$0.29 | -$0.92 | -$1.7 | -$0.79 | $1.26 | $7.28 |
| EPS Growth | n/a | -217.24% | -84.78% | 53.53% | 259.49% | 477.78% |
| Avg. Price | $73.85 | $79.34 | $138.02 | $177.95 | n/a | $178.72 |
| P/E Ratio | -263.75 | -86.24 | -80.71 | -199.94 | nan | 22.57 |
| Free Cash Flow (M) | $924 | $821 | $1,387 | $1,792 | $2,631 | $3,101 |
| CAPEX (M) | $131 | $214 | $116 | $193 | $146 | $157 |
| Total Debt (M) | $1,430 | $3,119 | $3,672 | $3,679 | $1,992 | n/a |
| Net Debt / EBITDA | 1.67 | 36.06 | -32.02 | 17.18 | -0.75 | nan |
| Current Ratio | 1.78 | 1.63 | 0.68 | 0.7 | 0.86 | 0.89 |
Palo Alto Networks has rapidly growing revenues and a flat capital expenditure trend and exceptional EPS growth. Additionally, the company's financial statements display generally positive cash flows and wider gross margins than its peer group. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.89.
Palo Alto Networks's Valuation Is in Line With Its Sector Averages:
Palo Alto Networks has a trailing twelve month P/E ratio of 49.7, compared to an average of 30.01 for the Technology sector. Based on its EPS guidance of $7.2, the company has a forward P/E ratio of 26.6. According to the 59.1% compound average growth rate of Palo Alto Networks's historical and projected earnings per share, the company's PEG ratio is 0.84. 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 22.9%. On this basis, the company's PEG ratio is 2.17. 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 11.39 is higher than the sector average of 3.91. The company's shares are currently trading 270.4% below their Graham number. Ultimately, Palo Alto Networks's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Palo Alto Networks Has an Average Rating of Buy:
The 50 analysts following Palo Alto Networks have set target prices ranging from $112.5 to $240.0 per share, for an average of $203.07 with a buy rating. The company is trading -10.8% 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 3.2% of the company's shares are sold short. Institutions own 80.8% of the company's shares, and the insider ownership rate stands at 0.86%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 62% stake in the company is worth $10,848,813,251.
