Palo Alto Networks Inc (PANW) stock analysis
Palo Alto Networks Inc (PANW) clears 1 of this site's 8 mechanical value filters, 1 of 8 Buffett-style checks and 1 of 5 Lynch-style checks. At $354.92 it trades 304.4% above this site's neutral DCF value (a margin of safety of -304.4%). Its earnings quality rates Weak and it returns −0.3% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Palo Alto Networks do?
Palo Alto Networks sells cybersecurity: network firewalls, cloud security and security-operations software, increasingly bundled into subscription platforms. It has grown partly through acquisitions.
Brands and businesses it owns
- Strata
- Prisma
- Cortex
What stands out about Palo Alto Networks?
- The share price implies more than 40% yearly growth. At $354.92, free cash flow per share would have to grow faster than 40% a year, fading to 2.5% by year 10, for this site's DCF to match the price. Change the assumptions.
- Misses 4 of the 8 value filters. It fails Trailing P/E < 25 (925.25), PEG Ratio < 1.5 (49.01) and Price/Book < 8 (10.33) and 1 more; the other 1 pass and 3 were not evaluated. See every filter.
- Strongest against peers: debt / equity. At 0.06 (peer median 0.60) it ranks 4th of 44 among technology stocks this site tracks. See the ranking.
- Weakest against peers: P/E ratio. At 925.2× (peer median 26.0×) it ranks 38th of 39 among technology stocks this site tracks. See the ranking.
- Earnings quality: Weak · 2 flags. Beneish M-score −2.50 · accruals −11.8% of assets · 287% of profit arrived as cash · stock comp 15.5% of revenue · share count +3.9% a year. From the latest 10-K (year to Jul 2026). See the Earnings Quality Screener.
How has Palo Alto Networks' share price moved?
The interactive price chart needs JavaScript.
Is Palo Alto Networks undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -304.4%
- P/E vs. its own history 925.2x · at/above its priciest point Real range: 44.6x–829.6x over 4 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 4.00/5 62 analysts this month: 15 strong buy, 33 buy, 13 hold, 1 sell, 0 strong sell (Finnhub). Down from 4.02 last month.
- Earnings quality (is the profit real?) Weak · 2 flags Beneish M-score −2.50 · accruals −11.8% of assets · 287% of profit arrived as cash · stock comp 15.5% of revenue · share count +3.9% a year. From the latest 10-K (year to Jul 2026) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) −0.3% net Latest fiscal year (2026): dividends 0.0% + buybacks 0.4% − stock comp 0.6%, as a share of today's market cap. Stock comp outruns what comes back in cash. Over 13 years its split-adjusted share count rose 88%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $9.58 per $1 of new profit · Capital-hungry · but only 9% return on capital Operating profit −$108M → $874M, capital needed $70M → $9.5B, 2017–2026 (3-year averages); return on capital now 9% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 49.0 · Well above fair P/E 925.2× ÷ 18.9% a year of growth behind it. 441st lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 0 of 4 · misses capital-light, real profit, cash back, price Capital-light growth: not cleared (profit started from a loss); Profit is real: not cleared (2 earnings-quality flags); Cash to owners: not cleared (−0.3% a year net); Fair price (PEG): not cleared (PEG 49.0, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 4 flags
- Standing vs. sector peers 2 of 6 measures above the median Compared with the 43 other technology stocks this site tracks: 1 in the top third, 4 in the bottom third.
How does Palo Alto Networks compare with its peers?
2 of 6 measures sit above the median of the 43 other technology stocks tracked here, 1 in the top third and 4 in the bottom third.
- P/E ratiolower is cheaper · peer median 26.0× 925.2× ✕38th of 39
- Free-cash-flow yieldhigher is cheaper · peer median 3.8% 1.4% ✕38th of 44
- Return on equityhigher is better · peer median 24% 2% ✕38th of 44
- Net marginhigher is better · peer median 16.9% 2.7% ✕38th of 44
- Revenue growthhigher is better, year on year · peer median 19.1% 24.5% –16th of 44
- Debt / equitylower is safer · peer median 0.60 0.06 ✓4th of 44
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and PANW doesn't clear enough of it yet. In its favor: PANW carries a conservative amount of debt relative to equity. Where it comes up short: PANW isn't clearing the return-on-equity bar he'd want to see right now, and its five-year average return on equity falls short too, so this isn't just a one-off dip, runs thinner pretax margins than he'd like to see, hasn't grown earnings per share fast enough over five years to impress him, doesn't cover its interest expense as comfortably as he'd want, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✕
- ROE (5yr avg) > 11% ✕
- Debt/Equity < 0.5 ✓
- Pretax margin > 15% ✕
- EPS growth (5yr) > 7% ✕
- Interest coverage > 5x ✕
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
- Bonus: returning capital via buybacks FY2026
Lynch looked for growth stories that weren't overpriced for that growth, and PANW falls short of his bar. In its favor: PANW isn't over-leveraged for a company of its type. Where it comes up short: PANW doesn't pay much of a dividend, which is the main reason to own a slow grower in the first place, isn't even growing at the modest pace he'd expect from a slow grower, is priced too rich for how little growth is actually left in the business, and trades expensive relative to the cash it actually generates.
- Dividend yield > 2.5% ✕
- EPS growth 0%-10% ✕
- Debt/Equity < 0.6 ✓
- P/E < 20 ✕
- Price/FCF < 25 ✕
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Palo Alto Networks pass?
- Market Cap > $25B $284.1B
- Trailing P/E < 25 925.25
- PEG Ratio < 1.5 49.01
- Price/Book < 8 10.33
- Price/Sales < 7 24.74
- EPS Growth YoY > -5% n/a
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Palo Alto Networks' margin of safety?
-374% on 2026-10-07 → -304% on 2026-10-23 (5 weekly readings).
Where is Palo Alto Networks in its 52-week range?
What is the short interest in Palo Alto Networks?
21,608,068 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Palo Alto Networks? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case -139%
- Short interest under 5% of float 2.7%
- Passes most of the 6 fundamental filters 2/6 passed
- Price run-up backed by value, not just momentum +152% off 52wk low
- Debt/equity stable since 2017 0.69 → 1.14
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Palo Alto Networks shareholders gained per year?
Not enough clean earnings history to compute this for PANW yet - a loss year in the window breaks the growth math rather than faking a number through it.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from PANW's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Palo Alto Networks' 10-year financials show?
From PANW's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Palo Alto Networks
What kind of company is Palo Alto Networks?
Palo Alto Networks sells cybersecurity: network firewalls, cloud security and security-operations software, increasingly bundled into subscription platforms. It has grown partly through acquisitions. Brands and businesses it owns include Strata, Prisma and Cortex. This site groups it with Technology stocks.
Is Palo Alto Networks trading above or below its DCF value?
At $354.92, PANW trades 304.4% above this site's neutral DCF value of $87.76 per share, a margin of safety of −304.4%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Palo Alto Networks pass?
PANW passes 1 of 8. It passes Market Cap > $25B ($284.1B). It misses Trailing P/E < 25 (925.25), PEG Ratio < 1.5 (49.01), Price/Book < 8 (10.33) and Price/Sales < 7 (24.74). EPS Growth YoY > -5%, vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
Are Palo Alto Networks's reported earnings reliable?
This site's earnings-quality check rates PANW Weak · 2 flags. Beneish M-score −2.50 · accruals −11.8% of assets · 287% of profit arrived as cash · stock comp 15.5% of revenue · share count +3.9% a year. From the latest 10-K (year to Jul 2026). Concerns: stock-based compensation (flagged) and share dilution (flagged). The five checks are the Beneish M-score (manipulation risk), accruals, cash conversion, stock-based compensation and share dilution; the Earnings Quality Screener shows how each is graded.
How fast has Palo Alto Networks grown its revenue and profit?
From fiscal 2017 to fiscal 2026, PANW's revenue grew from $1.8 billion to $11.5 billion, 23.2% a year. Net income went from −$203 million to $307 million, and its net profit margin from -11.6% to 2.7%. In fiscal 2026 it produced $4.1 billion of free cash flow (cash from operations minus capital spending), 35.8% of its revenue. All figures are from PANW's own 10-K filings (SEC EDGAR) and are shown year by year in the 10-Year Financials section of the card above.
When does Palo Alto Networks report earnings next?
Palo Alto Networks's next earnings report is expected on November 12, 2026, with analysts expecting earnings of $0.99 per share. Dates come from the Finnhub earnings calendar and can move. In its last 4 quarters it beat the estimate 4 times, by an average of +4.2%.
Where do these numbers come from?
- Financial statements: Palo Alto Networks's 10-K annual report for the year ended Jul 31, 2026, filed Sep 10, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Palo Alto Networks Inc analysis
This page shows every value-investing check the site runs on Palo Alto Networks Inc (PANW) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.