Palo Alto Networks (PANW)

Information Technology · $271B market cap · SEC CIK 0001327567

Next reports on Nov 18, 2026, with analysts expecting $0.99 in earnings per share.

52-week range $139.57 to $432.33. 25% below its 52-week high and 134% above its low.

The case for PANW

• Revenue up 24.5% on the year.
• Generated $4.1B of free cash flow in FY2026, 36% of revenue.
• Has compounded revenue at 21.9% a year over five years.
• Barely leveraged. Debt is 0.06× equity.
• Gross margin of 70% absorbs cost shocks.
• Up 55.9% over the past year.

The case against

• Expensive for its growth: 882.5× earnings, where 23% a year of growth would justify about 42×.
• Earnings per share down 68.0%.
• Priced at 23.6× sales, which leaves no room for a stumble.
• Return on equity of only 2%.
• Net margin of 2.7% leaves very little room for error.
• Current liabilities exceed current assets (ratio 0.87).

What the score is made of

Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.

The financials

The financials, five years deep

Pulled from Palo Alto Networks's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

What Palo Alto Networks says it does

Palo Alto Networks, Inc. is a global artificial intelligence (“AI”) cybersecurity provider and our vision is a world where each day is safer and more secure than the one before. We were incorporated in 2005 and are headquartered in Santa Clara, California. Our mission is to be the cybersecurity partner of choice, protecting our digital way of life. Our platforms and services help secure enterprise users, networks, clouds, endpoints, AI apps and agents, and identities by delivering comprehensive cybersecurity backed by AI and automation, and provide real-time visibility and monitoring across cloud infrastructure, applications and AI workloads. A key element of our strategy is to help our customers simplify their security architectures through consolidating disparate point products. We execute on this strategy by developing our capabilities and packaging our offerings into platforms, which are able to cover many of our customers’ needs…

Risk factors PANW lists in its 10-K

• Our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment
• Our revenue growth rate in recent periods may not be indicative of our future performance, and we may not be able to maintain profitability, which could cause our business, financial condition, and operating results to suffer
• Our operating results may vary significantly from period to period, including due to seasonality, which makes our results difficult to predict and could cause our results to fall short of expectations
• Our consumption- or usage-based offerings may expose us to customer usage optimization behavior that could create revenue volatility
• The sales prices of our products, subscriptions, and support offerings may decrease, which may reduce our revenue and gross profits and adversely impact our financial results
• We are exposed to the credit and liquidity risk of our customers, and to credit exposure in weakened markets, which could result in material losses
• A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks
• We face intense competition and we may lack sufficient financial or other resources to maintain or improve our competitive position
• The “identity security” market lacks a universally accepted definition, which could lead to mischaracterization of our offerings and adverse evaluations by industry stakeholders
• Customer trends toward vendor consolidation in cybersecurity may favor competitors offering broader platforms
• Cloud infrastructure providers and advanced AI companies increasingly offer native security and observability capabilities that compete directly with our offerings
• As a result of the CyberArk acquisition, the scope and size of our business have substantially changed, which resulted in certain incremental risks, including increased competition
• The success of our strategy depends on maintaining a broad ecosystem of integrations with third-party technologies, which requires significant ongoing investment
• Issues in the development, deployment, or use of AI may result in reputational harm, legal liability, and could adversely affect our business and operating results
• The emergence of AI agents as a new class of identity presents both opportunities and risks that could impact our identity security offerings
• A significant network or data security incident may materially impact our reputation, financial condition, and operating results
• Our shared responsibility security model relies on customers to configure and use our products securely, and customer errors could harm our reputation even when we are not at fault
• Our subscription agreements typically contain service-level commitments, and failure to meet these commitments could reduce our revenue and harm our business
• We rely on data center facilities operated by third-party cloud service providers, and any limitations on capacity, or interference with our use could adversely affect our business, financial condition, and results of operations
• Claims by others that we infringe their intellectual property rights could harm our business
• Our proprietary rights may be difficult to enforce or protect, which could enable others to copy or use aspects of our products or subscriptions without compensating us
• Our use of open source software in our products and subscriptions could negatively affect our ability to sell our products and subscriptions and subject us to possible litigation
• We license technology from third parties, and our inability to maintain those licenses could harm our business
• If we are unable to attract, retain, and motivate our key technical, sales, and management personnel, our business could suffer
• We are exposed to fluctuations in foreign currency exchange rates, which could negatively affect our financial condition and operating results
• We face risks associated with having operations and employees located in Israel
• We may have exposure to tax liabilities that are greater than anticipated
• Our reputation and business could be negatively impacted by corporate responsibility matters, including our reporting of such matters
• Failure to comply with governmental laws and regulations could harm our business
• The market price of our common stock historically has been volatile, and the value of an investment in our common stock could decline
• The issuance of additional common stock in connection with financings, acquisitions, investments, our stock incentive plans, convertible notes, or otherwise will dilute the stock held by all other stockholders
• We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance shareholder value, and share repurchases could affect the price of our common stock
• We do not intend to pay dividends for the foreseeable future
• Our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment, which could also reduce the market price of our common stock
• The Capped Calls may affect the value of the 2030 Notes and our common stock
• Our business is subject to the risks of earthquakes, fire, power outages, floods, health risks, climate change, and other catastrophic events, and to interruption by man-made problems, such as terrorism

Filings

Other Information Technology companies