PANW
Palo Alto Networks · Information Technology · Systems Software
$403.83
52w 139.57 – 432.33
20y monthly, adjusted
Mkt cap
$330.3B
P/E
1,118.8
P/FCF
83.5
FCF yield
1.2%
ROE
1.1%
Shldr yield
0.3%
div 0.0% + bb 0.3%
What today's price assumes
At $330.3B, the market is pricing in 27.3% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 21.5% per year — the price asks for acceleration beyond the historical record.
Simple DCF per-share range: $77 · $172 · $248 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 33.1× across 8 years, PANW would trade near $184/share (25th–75th percentile: $164–$207); it trades at 72.6× 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
+18.5%
Rev 5y
+22.0%
Rev 10y
+23.6%
EPS 5y
—
EPS 10y
—
FCF 5y
+24.3%
FCF 10y
+21.5%
Fundamentals
Fiscal 2011–2026, 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 |
|---|---|---|---|---|---|---|
| Q4'26 * | $3.4B | +34.5% | −$282.0M | −211.0% | -0.46 | $1.4B |
| 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 | +15.9% | $254.0M | −29.1% | 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% | $358.1M | +57.3% | 0.25 | $513.1M |
| 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 |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +18.5% | +22.0% | +23.6% | +35.6% |
| Operating cash flow | +17.9% | +24.8% | +21.3% | +39.1% |
| Free cash flow | +16.1% | +24.3% | +21.5% | +43.1% |
| EPS (diluted) | −14.5% | — | — | — |
| Equity | +150.5% | +112.5% | +40.8% | — |
| LT debt | −13.6% | +0.7% | — | — |
| Diluted shares | +3.7% | +2.7% | — | — |
| Stock price | +49.2% | +36.6% | +31.7% | — |
$100, 3 years ago
$332vs $192 in SPY
49.2% vs 24.4%/yr
$100, 5 years ago
$476vs $181 in SPY
36.6% vs 12.6%/yr
$100, 10 years ago
$1,575vs $428 in SPY
31.7% vs 15.6%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$57.38
$240.5B created / $4.2B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
16.6%
OCF ÷ (equity + debt)
OCF / EV yield
1.3%
MC vs 10× OCF
7.54
≤1 = priced under 10× OCF
Debt / FCF
—
SBC / FCF
43.1%
Owner earnings
$2.3B
OCF − capex − SBC
OE yield
0.7%
Share count 5y
+2.3%
per year; negative = buybacks
Capital intensity
4.6%
net PP&E ÷ revenue
Sales efficiency
$0.03
new PP&E per $1 new revenue, 5y
Growth engine (5y): reinvested 141.1% of operating cash flow at an incremental return of 13.3% — an organically fundable growth rate of about 18.7% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
16 of 26 checks pass · 62%. 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
24.3% · 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
4 of 10 · net income > 0 in ≥ 8 of last 10
- pass
Cash flow keeps up with sales
24.8% vs 22.0% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
4/7
- fail
Net margin
2.7% · ≥ 8%
- fail
Operating margin
6.1% · ≥ 10%
- pass
Gross margin stable or rising
70.4% vs 72.3% · no drop > 2 pts over 3y
- fail
Return on equity
1.1% · ≥ 12%
- pass
Cash ROIC
16.6% · ≥ 12%
- pass
FCF margin
35.8% · ≥ 5%
- pass
Earnings back their cash
OCF $4.6B vs NI $307.0M · 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
$27.5B · 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
2.3% · ≤ +0.5%/yr over ~5y
- fail
Stock comp restrained
43% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
24% · dividends + buybacks ≤ 100% of FCF
- pass
Repurchases are a habit
9 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
0/4
- fail
FCF yield
1.2% · ≥ 3%
- fail
Earnings multiple
1118.8 · P/E ≤ 25
- fail
Price asks less than history delivered
27.3% vs 21.5% · implied FCF growth ≤ historical FCF CAGR
- fail
Shareholder yield
0.3% · 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.
Shareholder dilution
Diluted share count has grown by more than 2% per year over ~5 years.
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 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 11,480 | 8,077 | 695 | 307 | 0.40 | 4,553 | 440 | 4,113 | — | 1,000 | 1,774 | 2,514 | — | 27,492 | 764 |
| 2025 | 9,221 | 6,770 | 1,243 | 1,134 | 1.60 | 3,716 | 247 | 3,469 | — | 0 | 1,295 | 2,269 | — | 7,824 | 709 |
| 2024 | 8,027 | 5,968 | 684 | 2,578 | 3.64 | 3,258 | 157 | 3,101 | — | 567 | 1,076 | 1,535 | — | 5,169 | 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.