Palo Alto Networks (PANW)
NASDAQ:PANW
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Palo Alto Networks
(NASDAQ:PANW)
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Rating:80Outperform
Price Target:
$322.00
▲(91.84% Upside)
Action:Reiterated
Date:06/04/26
The score is driven primarily by strong financial performance (notably cash flow strength and improved balance sheet) and a very positive earnings call with raised FY2026 guidance and accelerating platform/ARR metrics. Technicals are also supportive with clear upward momentum, while the main offset is a very high P/E and no dividend yield support.
Positive Factors
Robust cash generation
Consistent and growing operating and free cash flow provide durable financing for R&D, integrations, and buybacks without relying on external capital. High FCF supports reinvestment into product roadmap and margin improvement, and cushions the business against cyclical enterprise IT spend downturns.
Negative Factors
Elevated stock-based comp
Higher SBC as a percent of revenue dilutes reported margins and can compress non-GAAP to GAAP convergence for the next several quarters. While described as transitional, elevated equity comp increases operating cost run-rate and can temper near-term EPS and ROE metrics until it declines.
Read all positive and negative factors
Positive Factors
Negative Factors
Robust cash generation
Consistent and growing operating and free cash flow provide durable financing for R&D, integrations, and buybacks without relying on external capital. High FCF supports reinvestment into product roadmap and margin improvement, and cushions the business against cyclical enterprise IT spend downturns.
Read all positive factors
Palo Alto Networks Key Performance Indicators (KPIs)
Any
Gross Profit by Segment
Reveals profitability across different business units, highlighting which segments are driving earnings and where there may be opportunities or challenges.
Reveals profitability across different business units, highlighting which segments are driving earnings and where there may be opportunities or challenges.
Data provided by:
The Fly
The FlyPalo Alto Networks (PANW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$227.59B
Dividend YieldN/A
Average Volume (3M)8.66M
Price to Earnings (P/E)235.3
Beta (1Y)1.38
Revenue Growth19.51%
EPS Growth-33.05%
CountryUS
Employees15,758
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.19
Shares Outstanding815,000,000
10 Day Avg. Volume10,543,341
30 Day Avg. Volume8,664,769
Financial Highlights & Ratios
PEG Ratio-1.76
Price to Book (P/B)14.70
Price to Sales (P/S)12.47
P/FCF Ratio33.15
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue17.74
Enterprise Value/Gross Profit24.66
Enterprise Value/Ebitda116.19
Forecast
1Y Price Target
$327.52Price Target Upside95.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering37
EPS Forecast (FY)3.77
Revenue Forecast (FY)$11.30B
Palo Alto Networks Business Overview & Revenue Model
Company Description
Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; Panorama, a security management solution for the control of firewall appliances and software deployed on an end-customer's ne...
How the Company Makes Money
Palo Alto Networks primarily makes money by selling subscriptions and support tied to its cybersecurity platforms, along with related product revenue. A significant portion of revenue is generated from recurring subscriptions for cloud-delivered s...
Palo Alto Networks Earnings Call Summary
Earnings Call Date:Jun 02, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 24, 2026
Earnings Call Sentiment Positive
The earnings call was strongly positive overall. The company reported a record quarter with broad-based revenue, ARR and RPO growth, exceptional free cash flow expansion, rapid adoption of new AI security products (Prisma AIRS, XSIAM, Chronosphere), robust platformization metrics, and early acquisition integration success (CyberArk, Chronosphere). Near-term challenges include acquisition-related GAAP charges and elevated stock-based compensation, supply-chain and component cost pressure, and ongoing integration/migration tasks (e.g., Prisma Cloud to Cortex Cloud). These lowlights are largely transitional or industry-wide and management provided mitigation plans and timelines. Given the scale and magnitude of the growth metrics and cash flow improvements versus the manageable and largely one-time or solvable challenges, the overall tone is constructive and confident.Positive Updates
Record Quarter and Guidance Outperformance
Company delivered a record Q3 and surpassed every guided metric; raised full-year fiscal 2026 guidance across all metrics driven by acceleration in organic bookings and strong integration of recent acquisitions.
Negative Updates
GAAP Loss and Acquisition-Related Charges
GAAP net loss per share was $0.22 for the quarter due to transaction and integration costs tied to recent acquisitions; non-GAAP adjustments include elevated stock-based compensation and one-time charges.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Quarter and Guidance Outperformance
Company delivered a record Q3 and surpassed every guided metric; raised full-year fiscal 2026 guidance across all metrics driven by acceleration in organic bookings and strong integration of recent acquisitions.
Read all positive updates
Company Guidance
Palo Alto raised its full‑year fiscal 2026 guidance and moved to total‑company guidance; for Q4 FY26 it expects NGS ARR of $8.90–8.95B (59–60% YoY), RPO of $20.9–21.0B (32–33% YoY), revenue of $3.345–3.355B (~32% YoY), diluted non‑GAAP EPS of $0.96–0.98 and fully diluted share count of 830–840M. For the full fiscal year 2026 it guides NGS ARR $8.90–8.95B (59–60%), RPO $20.9–21.0B (32–33%), revenue $11.415–11.425B (24%), operating margin 28.9–29.2%, diluted non‑GAAP EPS $3.77–3.79, fully diluted share count 763–766M and an adjusted free cash flow margin of 37.5%.Palo Alto Networks Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
88
Very Positive
Cash Flow
91
Very Positive
| Breakdown | TTM | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.61B | 9.22B | 8.03B | 6.89B | 5.50B | 4.26B |
| Gross Profit | 7.63B | 6.77B | 5.97B | 4.98B | 3.78B | 2.98B |
| EBITDA | 1.62B | 1.94B | 1.28B | 869.00M | 95.60M | -46.60M |
| Net Income | 842.80M | 1.13B | 2.58B | 439.70M | -267.00M | -498.90M |
Balance Sheet | ||||||
| Total Assets | 46.27B | 23.58B | 19.99B | 14.50B | 12.25B | 10.24B |
| Cash, Cash Equivalents and Short-Term Investments | 3.11B | 2.90B | 2.58B | 2.39B | 3.63B | 2.90B |
| Total Debt | 2.07B | 338.20M | 1.34B | 2.27B | 3.95B | 3.54B |
| Total Liabilities | 18.60B | 15.75B | 14.82B | 12.75B | 12.04B | 9.48B |
| Stockholders Equity | 27.67B | 7.82B | 5.17B | 1.75B | 210.00M | 763.60M |
Cash Flow | ||||||
| Free Cash Flow | 4.29B | 3.47B | 3.10B | 2.63B | 1.79B | 1.39B |
| Operating Cash Flow | 4.22B | 3.72B | 3.26B | 2.78B | 1.98B | 1.50B |
| Investing Cash Flow | -2.86B | -2.20B | -1.51B | -2.03B | -933.40M | -1.48B |
| Financing Cash Flow | -1.38B | -778.90M | -1.34B | -1.73B | -806.60M | -1.10B |
Palo Alto Networks Technical Analysis
Positive
167.85
Price Trends
203.86
Positive
185.13
Positive
192.13
Positive
Market Momentum
23.70
Negative
64.31
Neutral
57.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PANW, the sentiment is Positive. The current price of 167.85 is below the 20-day moving average (MA) of 253.39, below the 50-day MA of 203.86, and below the 200-day MA of 192.13, indicating a bullish trend. The MACD of 23.70 indicates Negative momentum. The RSI at 64.31 is Neutral, neither overbought nor oversold. The STOCH value of 57.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PANW.
Palo Alto Networks Risk Analysis
Palo Alto Networks disclosed 47 risk factors in its most recent earnings report. Palo Alto Networks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Palo Alto Networks Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $227.59B | 235.32 | 15.49% | ― | 19.51% | -33.05% | |
77 Outperform | $109.66B | 54.69 | 155.65% | ― | 15.75% | 6.24% | |
76 Outperform | $183.03B | -26,901.45 | -4.15% | ― | 23.17% | 73.54% | |
70 Outperform | $14.22B | 13.45 | 36.43% | ― | 5.84% | 27.53% | |
68 Neutral | $21.87B | -271.64 | -3.71% | ― | 24.61% | -91.58% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
PANW
Palo Alto Networks
272.05
72.45
36.30%
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Palo Alto Networks Corporate Events
Private Placements and FinancingRegulatory Filings and Compliance
Palo Alto Networks Linked to CyberArk Convertible Notes Settlement
Neutral
Mar 23, 2026
On March 23, 2026, CyberArk Software Ltd. notified holders of its 0.00% Convertible Senior Notes due 2030, as well as the trustee U.S. Bank Trust Company, National Association and conversion agent, that the Default Settlement Method for conversion...
Business Operations and StrategyStock Buyback
Palo Alto Networks Adds $1 Billion to Share Buyback
Positive
Mar 12, 2026
Palo Alto Networks, Inc., a leading cybersecurity provider of network and cloud security solutions, serves enterprises and public-sector customers globally with platforms designed to protect digital infrastructure and data across complex IT enviro...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.