Complete PANW Stock Valuation Analysis
Comprehensive intrinsic value analysis using 6 different methodologies
PANW DCF Analysis
PANW (Palo Alto Networks, Inc.) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $5.5B | $6.9B | $8.0B | $9.8B | $11.8B | $14.0B | $16.3B | $18.7B |
| Revenue Growth % | - | 25.3% | 16.5% | 22.5% | 20.3% | 18.2% | 16.4% | 14.8% |
| EBIT | $-188.8M | $387.3M | $683.9M | $491.7M | $591.4M | $699.2M | $813.9M | $934.1M |
| EBIT Margin % | -3.4% | 5.6% | 8.5% | 5.0% | 5.0% | 5.0% | 5.0% | 5.0% |
| Tax Rate % | 25.0% | 22.4% | 0.0% | 19.5% | 20.0% | 20.6% | 21.1% | 21.7% |
| NOPAT | $-141.6M | $300.7M | $683.9M | $396.0M | $472.9M | $555.3M | $641.9M | $731.6M |
| NOPAT Margin % | -2.6% | 4.4% | 8.5% | 4.0% | 4.0% | 4.0% | 3.9% | 3.9% |
| Capex | $192.8M | $146.3M | $156.8M | $326.4M | $372.9M | $418.9M | $463.3M | $505.1M |
| Capex / Revenue % | 3.5% | 2.1% | 2.0% | 3.3% | 3.2% | 3.0% | 2.8% | 2.7% |
| Depreciation | $282.6M | $282.2M | $283.3M | $418.3M | $503.0M | $594.8M | $692.4M | $794.6M |
| D&A / Revenue % | 5.1% | 4.1% | 3.5% | 4.3% | 4.3% | 4.3% | 4.3% | 4.3% |
| Change in NWC | $-1.4B | $201.9M | $856.5M | $144.0M | $138.6M | $131.1M | $122.1M | $112.1M |
| NWC Change / Revenue % | -25.8% | 2.9% | 10.7% | 1.5% | 1.2% | 0.9% | 0.7% | 0.6% |
| Unlevered FCF | $1.4B | $234.7M | $-46.1M | $343.8M | $464.5M | $600.1M | $749.0M | $909.1M |
| UFCF % Chg. | - | -82.9% | -119.6% | 845.8% | 35.1% | 29.2% | 24.8% | 21.4% |
| FCF / Revenue % | 24.9% | 3.4% | -0.6% | 3.5% | 3.9% | 4.3% | 4.6% | 4.9% |
| Discount Factor | - | - | - | 0.921 | 0.848 | 0.780 | 0.718 | 0.661 |
| Present Value of FCF | - | - | - | $316.5M | $393.7M | $468.2M | $538.0M | $601.1M |
| Sum of PV of UFCF | - | - | - | $316.5M | $710.2M | $1.2B | $1.7B | $2.3B |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 5.0% |
| Tax Rate | 19.5% |
| After Tax Cost of Debt | 4.0% |
| Risk Free Rate | 4.46% |
| Market Risk Premium | 4.3% |
| Beta | 0.97 |
| Cost of Equity | 8.7% |
| Total Debt | $1.4B |
| Market Cap | $131.2B |
| Total Capital | $132.6B |
| Debt Weighting | 1.1% |
| Equity Weighting | 98.9% |
| WACC | 8.6% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $909.1M |
| Terminal Value | $15.2B |
| PV of Terminal Value | $10.1B |
| Cumulative PV of UFCF | $2.3B |
| Net Debt | $-124.9M |
| Equity Value | $12.5B |
| Shares Outstanding | 708.0M |
| Implied Share Price | $18 |
| Current Share Price | $197 |
| Implied Upside/(Downside) | -91.0% |
Valuation Summary
$17.66
Implied Price
$196.77
Current Price
-91.0%
Upside/Downside
8.6%
WACC
PANW Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 10 peer companies in Technology
P/E Ratio
$70.68
-64.1%
Peer Median: 39.9x
EV/EBITDA
$53.49
-72.8%
Peer Median: 23.5x
P/S Ratio
$164.64
-16.3%
Peer Median: 12.8x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for PANW's business model and current situation.
Multiple Comparison
| Multiple | PANW Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | 111.2x | 39.9x | 36.5x | 178.4% | Overvalued |
| EV/EBITDA | 86.4x | 23.5x | 23.7x | 267.5% | Overvalued |
| P/S Ratio | 15.3x | 12.8x | 12.7x | 19.5% | Fair Value |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $3444.39B | 35.8x | 23.3x | 12.8x | |
| $473.97B | 39.9x | 23.5x | 8.5x | |
| $209.04B | 137.5x | 89.5x | 18.2x | |
| $131.21B | 111.2x | 86.4x | 15.3x | |
| $121.85B | 0.0x | 490.3x | 30.8x | |
| $78.68B | 42.5x | 32.8x | 12.8x | |
| $45.95B | 0.0x | 434.7x | 19.0x | |
| $19.11B | 0.0x | 0.0x | 21.6x | |
| $17.87B | 28.0x | 15.2x | 4.5x | |
| $7.69B | 0.0x | 0.0x | 10.1x |
PANW Graham Number
Benjamin Graham's conservative valuation formula for defensive investors
Input Data
| EPS (TTM) | $1.77 | Latest 10-K |
| Book Value per Share | $7.30 | Latest 10-K Balance Sheet |
| Graham Constant | 22.5 | Benjamin Graham's formula |
Graham Number Result
$17.05
Intrinsic Value
$196.77
Current Price
-91.3%
Upside/Downside
Confidence: High
Conservative value investing approach
Calculation Breakdown
Formula:
√(22.5 × EPS × BVPS)
Step 1: Multiply constant by EPS
22.5 × 1.77 = 39.81
Step 2: Multiply by Book Value per Share
39.81 × 7.30 = 290.70
Step 3: Take square root
√290.70 = 17.05
Graham Number Result:
$17.05
PANW Graham Intrinsic Value
Growth-adjusted intrinsic value with two formula variants
Formula Selection
V = EPS × (8.5 + 2g)
Graham's original P/E shortcut for growth, no interest-rate adjustment
V = [EPS × (8.5 + 2g) × 4.4] / Y
Graham's 1974 refinement: adds rate-environment sensitivity
Active Formula: Base-Growth
1.77 × (8.5 + 2 × 8.0%)
Input Data & Growth Assumptions
Current EPS (TTM)$1.77
Latest 10-K • 2024-07-31T00:00:00
No positive historical growth rates available.
Graham's formula is designed for growing companies. Use the custom input below with a conservative positive growth estimate (5-10%).
Custom
%
Enter a positive growth rate estimate (0-50%)
Graham Intrinsic Value Result
$43.35
Intrinsic Value
$196.77
Current Price
-78.0%
Upside/Downside
Base Formula
Growth: 8.0%
PANW Peter Lynch Fair Value
Growth-based valuation using PEG ratio analysis for growth stocks
Fair Value Calculation
EPS (TTM)$1.77
Latest 10-K • 2024-07-31T00:00:00
No positive historical growth rates available. Using custom growth rate slider.
10.0%
1%50%
Fair Value Formula: EPS × Growth Rate
$1.77 × 10.0% = $17.69
$17.69
Fair Value
$196.77
Current Price
-91.0%
Upside/Downside
PEG Analysis
111.2x
Current P/E
10.0%
Growth Rate
11.12
PEG Ratio (P/E ÷ Growth Rate)
Significantly Overvalued
PEG Ratio Interpretation:
• PEG < 1.0: Undervalued (growth exceeds P/E)
• PEG = 1.0: Fairly valued (ideal Lynch ratio)
• PEG > 1.5: Overvalued (paying premium for growth)
Peter Lynch's Rule:
"The P/E ratio of any company that's fairly priced will equal its growth rate." A stock with 15% growth should trade at a P/E of 15 (PEG = 1.0).
PANW Earnings Power Value (EPV)
Normalized earnings-based valuation for sustainable earning power assessment
Earnings Normalization
| Earnings Component | Amount ($B) | Description |
|---|---|---|
| Reported Earnings | 2.6 | Base earnings from financial statements |
| Normalized Earnings | 2.6 | Final normalized earning power |
One-time Items: Remove non-recurring gains/losses
Cyclical Adjustment: Normalize for economic cycle position
EPV Result
$39.72
EPV per Share
$196.77
Current Price
-79.8%
Upside/Downside
9.2%
WACC: 9.2% (calculated from market data)
Confidence: High
Normalized earnings approach
EPV Calculation Breakdown
Enterprise Value Calculation
| Normalized Earnings | $2.6B |
| Cost of Capital | 9.2% |
| Enterprise Value | $28.1B |
Per Share Value
| Enterprise Value | $28.1B |
| Shares Outstanding | 0.7B |
| EPV per Share | $39.72 |
WACC Components
| Cost of Equity | 9.2% |
| After-Tax Cost of Debt | 3.5% |
| Equity Weight | 99.0% |
| Debt Weight | 1.0% |
| WACC | 9.2% |