Palo Alto Networks (PANW)
Information Technology · $304B market cap · SEC CIK 0001327567
fundamentals score out of 100
Next reports on Nov 17, 2026, with analysts expecting $0.99 in earnings per share.
The case for PANW
- Revenue up 24.5% on the year.
- Generated $3.5B of free cash flow in FY2025, 38% 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.
- Within 6% of its 52-week high: the trend is up.
The case against
- Very expensive at 990.6× earnings. Years of growth are already in the price.
- Earnings per share down 68.0%.
- Priced at 26.5× 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. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 14 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 51 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 26 |
| Momentumhow the price has behaved lately | 91 |
| Stabilityhow violently it moves, what it owes and what it pays you | 72 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
Key numbers
| Price / earnings | 990.6× |
|---|---|
| Price / book | 9.84× |
| Price / sales | 26.5× |
| Revenue growth (YoY) | +24.5% |
| EPS growth (YoY) | -68.0% |
| Gross margin | 70% |
| Operating margin | 6% |
| Net margin | 3% |
| Return on equity | 2% |
| Debt / equity | 0.06× |
| Current ratio | 0.87 |
| Dividend yield | none |
| Beta | 0.96 |
| 52-week range | $139.57 – $398.88 |
| Position in that range | 91% of the way up |
| 3-month return | +29.2% |
| 1-year return | +78.6% |
Five years of financials, as filed
Pulled from Palo Alto Networks's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $9.2B | $8.0B | $6.9B | $5.5B | $4.3B |
| Gross profit | $6.8B | $6.0B | $5.0B | $3.8B | $3.0B |
| Operating income | $1.2B | $684M | $387M | -$189M | -$304M |
| Net income | $1.1B | $2.6B | $440M | -$267M | -$499M |
| Operating cash flow | $3.7B | $3.3B | $2.8B | $2.0B | $1.5B |
| Capital expenditure | $247M | $157M | $146M | $193M | $116M |
| Total assets | $25.0B | $21.0B | $18.3B | $13.2B | $10.4B |
| Total liabilities | $15.6B | $14.6B | $13.9B | $12.4B | — |
| Shareholder equity | $9.4B | $6.4B | $4.4B | $729M | $118M |
| Cash | $4.2B | $2.2B | $1.8B | $1.3B | $1.9B |
| Long-term debt | — | — | — | $3.7B | $3.7B |
| Free cash flow | $3.5B | $3.1B | $2.6B | $1.8B | $1.4B |
| Gross margin | 73.4% | 74.3% | 72.3% | 68.8% | 70.0% |
| Operating margin | 13.5% | 8.5% | 5.6% | -3.4% | -7.1% |
| Net margin | 12.3% | 32.1% | 6.4% | -4.9% | -11.7% |
| Diluted shares | 709M | 708M | 685M | 296M | 289M |
Share count is up 145.2% over 4 years. Your slice has been diluted.
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
- Risks Related to Global Economic and Geopolitical Conditions
- 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