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Palo Alto Networks Inc
PANW : NYSE : Technology
$182.85 up10.83 | 6.30%
Today's Range: 178.47 - 185.10
Avg. Daily Volume: 1,653,800
11/24/15 - 4:00 PM ET

Financial Analysis

PALO ALTO NETWORKS INC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. PALO ALTO NETWORKS INC has weak liquidity. Currently, the Quick Ratio is 0.89 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 10.25% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)297.2192.35
EBITDA ($mil)-21.6-17.65
EBIT ($mil)-30.8-23.76
Net Income ($mil)-38.7-30.07

Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)761.3771.5
Total Assets ($mil)2094.41540.36
Total Debt ($mil)492.3471.86
Equity ($mil)543.8493.21

Profitability Q1 FY16 Q1 FY15
Gross Profit Margin76.4575.38
EBITDA Margin-7.26-9.17
Operating Margin-10.36-12.35
Sales Turnover0.490.43
Return on Assets-8.28-16.14
Return on Equity-31.92-50.41
Debt Q1 FY16 Q1 FY15
Current Ratio0.962.59
Interest Expense5.85.49
Interest Coverage-5.31-4.33

Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)84.7980.52
Div / share0.00.0
Book value / share6.416.13
Institutional Own % n/a n/a
Avg Daily Volume1654761.01595517.0


SELL. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. For additional comparison, its price-to-book ratio of 26.82 indicates a significant premium versus the S&P 500 average of 2.77 and a significant premium versus the industry average of 3.69. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, PALO ALTO NETWORKS INC seems to be trading at a premium to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
PANW NM Peers 38.31   PANW 34.88 Peers 28.48

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

PANW's P/E is negative making this valuation measure meaningless.


Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

PANW is trading at a premium to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
PANW 66.16 Peers 19.36   PANW NA Peers 0.59

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

PANW is trading at a significant premium to its peers.


Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
PANW 26.82 Peers 3.69   PANW 36.67 Peers 1.65

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

PANW is trading at a significant premium to its peers.


Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

PANW is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
PANW 14.12 Peers 2.92   PANW 55.94 Peers 4.16

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

PANW is trading at a significant premium to its industry.


Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

PANW has a sales growth rate that significantly exceeds its peers.



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