PANW
Palo Alto Networks · Information Technology · Systems Software
$350.90
52w 139.57 – 398.88
20y monthly, adjusted
Mkt cap
$286.0B
P/E
268.9
P/FCF
87.9
FCF yield
1.1%
ROE
14.5%
Shldr yield
0.0%
div 0.0% + bb 0.0%
What today's price assumes
At $286.0B, the market is pricing in 28.1% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 27.0% per year — expectations are roughly in line with history.
Simple DCF per-share range: $65 · $146 · $210 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 32.0× across 7 years, PANW would trade near $146/share (25th–75th percentile: $132–$161); it trades at 77.0× today.
Assumes the historical multiple regime persists — re-ratings can be permanent.
Growth record
Compound annual growth rates from as-filed 10-K data, split-adjusted
Rev 3y
+18.8%
Rev 5y
+22.0%
Rev 10y
+25.8%
EPS 5y
—
EPS 10y
—
FCF 5y
+33.4%
FCF 10y
+27.0%
Fundamentals
Fiscal 2011–2025, from SEC filings
Revenue
Net income
Free cash flow
Diluted shares (lower is better)
Margins
Capital returned (dividends + buybacks)
Cash vs long-term debt
Quarterly
Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.
Revenue by quarter
Net income by quarter
| Quarter | Revenue | YoY | Net income | YoY | EPS | OCF |
|---|---|---|---|---|---|---|
| Q3'26 | $3.0B | +31.1% | −$177.0M | −167.6% | -0.22 | $871.0M |
| Q2'26 | $2.6B | +14.9% | $432.0M | +61.8% | 0.61 | $554.0M |
| Q1'26 | $2.5B | +15.7% | $334.0M | −4.8% | 0.47 | $1.8B |
| Q4'25 * | $2.5B | +15.8% | $253.9M | −29.0% | 0.36 | $1.0B |
| Q3'25 | $2.3B | +15.3% | $262.0M | −6.0% | 0.37 | $628.0M |
| Q2'25 | $2.3B | +14.3% | $267.0M | −84.7% | 0.38 | $557.0M |
| Q1'25 | $2.1B | +13.9% | $351.0M | +80.7% | 0.49 | $1.5B |
| Q4'24 * | $2.2B | +12.1% | $357.7M | +57.1% | 0.25 | $512.7M |
| Q3'24 | $2.0B | +15.3% | $278.8M | +158.6% | 0.39 | $528.9M |
| Q2'24 | $2.0B | +19.3% | $1.7B | +1974.7% | 2.44 | $690.0M |
| Q1'24 | $1.9B | +20.1% | $194.2M | +871.0% | 0.56 | $1.5B |
| Q4'23 * | $2.0B | +26.0% | $227.7M | +6800.0% | 0.02 | $414.1M |
| Q3'23 | $1.7B | +24.1% | $107.8M | — | 0.31 | $432.1M |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +18.8% | +22.0% | +25.8% | — |
| Operating cash flow | +23.3% | +29.1% | +26.5% | — |
| Free cash flow | +24.6% | +33.4% | +27.0% | — |
| EPS (diluted) | — | — | — | — |
| Equity | +234.0% | +48.0% | +32.0% | — |
| LT debt | −13.6% | +0.7% | — | — |
| Diluted shares | +1.2% | +1.2% | — | — |
| Stock price | +42.3% | +35.5% | +31.8% | — |
$100, 3 years ago
$288vs $176 in SPY
42.3% vs 20.7%/yr
$100, 5 years ago
$457vs $181 in SPY
35.5% vs 12.6%/yr
$100, 10 years ago
$1,581vs $412 in SPY
31.8% vs 15.2%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$31.43
$106.4B created / $3.4B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
47.5%
OCF ÷ (equity + debt)
OCF / EV yield
1.2%
MC vs 10× OCF
8.21
≤1 = priced under 10× OCF
Debt / FCF
—
SBC / FCF
37.3%
Owner earnings
$2.2B
OCF − capex − SBC
OE yield
0.7%
Share count 5y
+1.4%
per year; negative = buybacks
Capital intensity
4.2%
net PP&E ÷ revenue
Sales efficiency
$0.01
new PP&E per $1 new revenue, 5y
Growth engine (5y): reinvested 32.7% of operating cash flow at an incremental return of 61.9% — an organically fundable growth rate of about 20.2% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
19 of 26 checks pass · 73%. Checks with structurally missing inputs are excluded.
Growth & Consistency
5/6
- pass
Revenue growth
22.0% · 5y CAGR ≥ 5%
- na
EPS growth
— · 5y CAGR ≥ 5%
- pass
FCF growth
33.4% · 5y CAGR ≥ 5%
- pass
Revenue rises consistently
9 of 9 · up in ≥ 7 of last 10 years
- pass
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
- fail
Profitable every year
3 of 10 · net income > 0 in ≥ 8 of last 10
- pass
Cash flow keeps up with sales
29.1% vs 22.0% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
7/7
- pass
Net margin
12.3% · ≥ 8%
- pass
Operating margin
13.5% · ≥ 10%
- pass
Gross margin stable or rising
73.4% vs 68.8% · no drop > 2 pts over 3y
- pass
Return on equity
14.5% · ≥ 12%
- pass
Cash ROIC
47.5% · ≥ 12%
- pass
FCF margin
37.6% · ≥ 5%
- pass
Earnings back their cash
OCF $3.7B vs NI $1.1B · OCF ≥ net income (latest FY)
Balance Sheet
5/5
- pass
Debt payable from cash flow
no debt · LT debt ≤ 3× FCF
- pass
Cash cushion
— · cash ≥ 50% of LT debt
- pass
Leverage
— · LT debt ≤ 1.5× equity
- pass
Equity positive and compounding
$7.8B · equity > 0 and grew over ~5y
- pass
Interest burden
0% · interest ≤ 15% of operating income
Capital Allocation
2/4
- fail
Share count flat or shrinking
1.4% · ≤ +0.5%/yr over ~5y
- fail
Stock comp restrained
37% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
0% · dividends + buybacks ≤ 100% of FCF
- pass
Repurchases are a habit
8 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
0/4
- fail
FCF yield
1.1% · ≥ 3%
- fail
Earnings multiple
268.9 · P/E ≤ 25
- fail
Price asks less than history delivered
28.1% vs 27.0% · implied FCF growth ≤ historical FCF CAGR
- fail
Shareholder yield
0.0% · dividends + buybacks ≥ 2% of market cap
Red flags
Mechanical checks — a flag is a question to investigate, not a verdict
Heavy stock compensation
Stock-based compensation consumes more than 30% of free cash flow.
Financial data
As filed in 10-Ks; per-share figures split-adjusted. $ in millions.
| FY | Revenue | Gross profit | Op income | Net income | EPS | OCF | CapEx | FCF | Dividends | Buybacks | SBC | Cash | LT debt | Equity | Shares |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 9,222 | 6,770 | 1,243 | 1,134 | 1.60 | 3,716 | 246 | 3,470 | — | 0 | 1,295 | 2,269 | — | 7,824 | 709 |
| 2024 | 8,028 | 5,968 | 684 | 2,578 | 3.64 | 3,258 | 157 | 3,101 | — | 567 | 1,075 | 1,535 | — | 5,170 | 708 |
| 2023 | 6,893 | 4,983 | 387 | 440 | 0.64 | 2,778 | 146 | 2,631 | — | 273 | 1,075 | 1,135 | 1,992 | 1,748 | 685 |
| 2022 | 5,502 | 3,783 | -189 | -267 | -0.39 | 1,985 | 193 | 1,792 | — | 892 | 1,011 | 2,119 | 3,677 | 210 | 685 |
| 2021 | 4,256 | 2,981 | -304 | -499 | -0.75 | 1,503 | 116 | 1,387 | — | 1,178 | 895 | 1,874 | 3,226 | 635 | 669 |
| 2020 | 3,408 | 2,409 | -179 | -267 | -0.40 | 1,036 | 214 | 821 | — | 1,198 | 658 | 2,958 | 3,084 | 1,102 | 669 |
| 2019 | 2,900 | 2,091 | -54 | -82 | -0.13 | 1,056 | 131 | 924 | — | 330 | 568 | 961 | 1,430 | 1,586 | 653 |
| 2018 | 2,274 | 1,629 | -104 | -122 | -0.19 | 1,038 | 112 | 926 | — | 259 | 497 | 2,507 | 1,920 | 1,160 | — |
| 2017 | 1,755 | 1,279 | -166 | -203 | -0.32 | 869 | 163 | 705 | — | 411 | 475 | 744 | 525 | 760 | — |
| 2016 | 1,379 | 1,009 | -157 | -193 | -0.32 | 659 | 73 | 586 | — | 0 | 393 | 734 | 500 | 895 | — |
| 2015 | 928 | 677 | -100 | -131 | -0.23 | 353 | 34 | 319 | — | 0 | 221 | 376 | 487 | 488 | — |
| 2014 | 598 | 439 | -215 | -227 | -0.44 | 88 | 36 | 52 | — | 0 | 100 | 654 | 467 | 469 | — |
| 2013 | 396 | 286 | -19 | -29 | -0.06 | 115 | 22 | 92 | — | 0 | 44 | 311 | — | 272 | — |
| 2012 | 255 | 185 | 4 | 1 | 0.00 | 77 | 15 | 63 | — | 0 | 14 | 323 | — | 229 | — |
| 2011 | 119 | 86 | -10 | -13 | -0.13 | 32 | 13 | 19 | — | 0 | 5 | 41 | — | -71 | — |
Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.