Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin6.1%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin2.7%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
F
Years to Pay Off Debt8.1 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt-$3.1B
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital-$1.3B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
N/A
Cash Flow
C
Free Cash Flow$4.1B
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income143.3%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$1.6B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Market Data
Key Margins
Gross Profit70.4%
Operating Margin6.1%
Net Margin2.7%
Company Info
Showing Key Metrics
Income Highlights
Metric
2026
2025
2024
2023
2022
Gross Profit %
70.4%▼
73.4%▼
74.3%▲
72.3%•
N/A
Operating Margin %
6.1%▼
13.5%▲
8.5%▲
5.6%•
N/A
Net Income %
2.7%▼
12.3%▼
32.1%▲
6.4%•
N/A
Diluted EPS
0.40▼
1.60▼
3.64▲
0.64•
N/A
Balance Sheet Highlights
Metric
2026
2025
2024
2023
2022
Total Assets
$48.5B
$23.6B
$20.0B
$14.5B
N/A
Total Debt
$2.5B▲
$338M▼
$1.3B▼
$2.3B•
N/A
Working Capital
-$1.3B▼
-$465M▲
-$833M▲
-$1.7B•
N/A
Years to Pay Debt
8.14
0.30
0.52
5.16
N/A
Cash Flow Highlights
Metric
2026
2025
2024
2023
2022
Free Cash Flow
$4.1B▲
$3.5B▲
$3.1B▲
$2.6B•
N/A
Owner Earnings
$1.6B
$1.7B
$3.0B
$868M
N/A
CapEx % of Net Income
143.3%
21.8%
6.1%
33.3%
N/A
Income Statement
2026
2025
2024
2023
2022
Tax Effect Of Unusual Items
9,200
-9,537
0
-1,770
Tax Rate For Calcs
0
0
0
0
Normalized EBITDA
1,368,000
1,975,000
1,280,000
876,900
Total Unusual Items
23,000
-33,000
200
-7,900
Total Unusual Items Excluding Goodwill
23,000
-33,000
200
-7,900
Net Income From Continuing Operation Net Minority Interest
307,000
1,134,000
2,578,000
439,700
Reconciled Depreciation
855,000
343,000
284,000
282,200
Reconciled Cost Of Revenue
3,403,000
2,451,000
2,059,000
1,909,700
EBITDA
1,391,000
1,942,000
1,280,000
869,000
EBIT
536,000
1,599,000
996,000
586,800
Net Interest Income
374,000
361,000
310,000
197,200
Interest Expense
0
3,000
8,000
20,500
Interest Income
374,000
364,000
318,000
224,400
Normalized Income
293,200
1,157,463
2,578,000
445,830
Net Income From Continuing And Discontinued Operation
307,000
1,134,000
2,578,000
439,700
Total Expenses
10,785,000
7,978,000
7,343,000
6,505,400
Total Operating Income As Reported
695,000
1,243,000
684,000
387,300
Diluted Average Shares
764,000
709,000
708,000
684,600
Basic Average Shares
749,000
663,000
638,000
606,400
Diluted EPS
0
0
0
0
Basic EPS
0
0
0
0
Diluted NI Availto Com Stockholders
307,000
1,134,000
2,578,000
439,700
Net Income Common Stockholders
307,000
1,134,000
2,578,000
439,700
Net Income
307,000
1,134,000
2,578,000
439,700
Net Income Including Noncontrolling Interests
307,000
1,134,000
2,578,000
439,700
Net Income Continuous Operations
307,000
1,134,000
2,578,000
439,700
Tax Provision
229,000
462,000
-1,590,000
126,600
Pretax Income
536,000
1,596,000
988,000
566,300
Other Income Expense
-533,000
-8,000
-6,000
-18,200
Other Non Operating Income Expenses
-556,000
25,000
-6,000
-10,300
Gain On Sale Of Security
23,000
-33,000
200
-7,900
Net Non Operating Interest Income Expense
374,000
361,000
310,000
197,200
Total Other Finance Cost
1,100
3,500
6,700
7,200
Interest Expense Non Operating
0
3,000
8,000
20,500
Interest Income Non Operating
374,000
364,000
318,000
224,400
Operating Income
695,000
1,243,000
684,000
387,300
Operating Expense
7,382,000
5,527,000
5,284,000
4,595,700
Research And Development
2,552,000
1,984,000
1,810,000
1,604,000
Selling General And Administration
4,830,000
3,543,000
3,474,000
2,991,700
Selling And Marketing Expense
3,931,000
3,100,000
2,794,000
2,544,000
General And Administrative Expense
899,000
443,000
680,000
447,700
Other Gand A
899,000
443,000
680,000
447,700
Salaries And Wages
465,700
422,800
Gross Profit
8,077,000
6,770,000
5,968,000
4,983,000
Cost Of Revenue
3,403,000
2,451,000
2,059,000
1,909,700
Total Revenue
11,480,000
9,221,000
8,027,000
6,892,700
Operating Revenue
11,480,000
9,221,000
8,027,000
6,892,700
Balance Sheet
2026
2025
2024
2023
2022
Ordinary Shares Number
815,000
667,900
650,200
616,600
Share Issued
815,000
667,900
650,200
616,600
Net Debt
856,200
1,558,300
Total Debt
2,500,000
338,000
1,344,400
2,270,700
Tangible Book Value
-1,535,000
2,494,000
1,444,700
-1,493,800
Invested Capital
29,266,000
7,824,000
6,133,600
3,739,900
Working Capital
-1,280,000
-465,000
-833,000
-1,689,500
Net Tangible Assets
-1,535,000
2,494,000
1,444,700
-1,493,800
Capital Lease Obligations
726,000
338,000
380,500
279,200
Common Stock Equity
27,492,000
7,824,000
5,169,700
1,748,400
Total Capitalization
29,266,000
7,824,000
5,169,700
1,748,400
Total Equity Gross Minority Interest
27,492,000
7,824,000
5,169,700
1,748,400
Stockholders Equity
27,492,000
7,824,000
5,169,700
1,748,400
Gains Losses Not Affecting Retained Earnings
-71,000
48,000
-1,600
-43,200
Other Equity Adjustments
-71,000
48,000
-1,600
-43,200
Retained Earnings
2,791,000
2,484,000
1,350,200
-1,227,400
Capital Stock
24,772,000
5,292,000
3,821,100
3,019,000
Common Stock
24,772,000
5,292,000
3,821,100
3,019,000
Total Liabilities Net Minority Interest
20,968,000
15,752,000
14,821,200
12,752,700
Total Non Current Liabilities Net Minority Interest
11,045,000
7,764,000
7,138,500
5,015,200
Other Non Current Liabilities
1,285,000
887,000
430,900
86,100
Non Current Deferred Liabilities
7,260,000
6,539,000
6,327,100
4,649,900
Non Current Deferred Revenue
7,009,000
6,450,000
5,939,400
4,621,800
Non Current Deferred Taxes Liabilities
251,000
89,000
387,700
28,100
Long Term Debt And Capital Lease Obligation
2,500,000
338,000
380,500
279,200
Long Term Capital Lease Obligation
726,000
338,000
380,500
279,200
Long Term Debt
1,774,000
Current Liabilities
9,923,000
7,988,000
7,682,700
7,737,500
Current Deferred Liabilities
7,747,000
6,302,000
5,541,100
4,674,600
Current Deferred Revenue
7,747,000
6,302,000
5,541,100
4,674,600
Current Debt And Capital Lease Obligation
963,900
1,991,500
3,676,800
Current Debt
963,900
1,991,500
3,676,800
Other Current Borrowings
963,900
1,991,500
3,676,800
Pensionand Other Post Retirement Benefit Plans Current
1,048,000
608,000
554,700
548,300
Payables And Accrued Expenses
1,128,000
1,078,000
623,000
523,100
Current Accrued Expenses
838,000
846,000
506,700
390,800
Payables
290,000
232,000
116,300
132,300
Accounts Payable
290,000
232,000
116,300
132,300
Total Assets
48,460,000
23,576,000
19,990,900
14,501,100
Total Non Current Assets
39,817,000
16,053,000
13,141,200
8,453,100
Other Non Current Assets
678,000
422,000
352,900
321,700
Non Current Deferred Assets
3,110,000
3,010,000
2,961,000
570,200
Non Current Deferred Taxes Assets
2,443,000
2,424,000
2,399,000
23,100
Non Current Accounts Receivable
944,000
1,002,000
1,182,100
653,300
Investments And Advances
4,835,000
5,555,000
4,173,200
3,047,900
Investmentin Financial Assets
4,835,000
5,555,000
4,173,200
3,047,900
Available For Sale Securities
4,835,000
5,555,000
4,173,200
3,047,900
Goodwill And Other Intangible Assets
29,027,000
5,330,000
3,725,000
3,242,200
Other Intangible Assets
7,017,000
763,000
374,900
315,400
Goodwill
22,010,000
4,567,000
3,350,100
2,926,800
Net PPE
1,223,000
734,000
747,000
617,800
Accumulated Depreciation
-747,000
-639,000
-559,200
-528,300
Gross PPE
1,970,000
1,373,000
1,306,200
1,146,100
Leases
366,000
325,000
274,000
268,900
Other Properties
749,000
394,000
430,300
310,200
Machinery Furniture Equipment
677,000
567,000
514,700
479,800
Land And Improvements
178,000
87,000
87,200
87,200
Current Assets
8,643,000
7,523,000
6,849,700
6,048,000
Other Current Assets
807,000
520,000
557,400
466,800
Current Deferred Assets
544,000
419,000
369,000
339,200
Prepaid Assets
466,800
208,900
Receivables
4,221,000
3,680,000
3,344,500
2,852,000
Other Receivables
592,000
715,000
725,900
388,800
Accounts Receivable
3,629,000
2,965,000
2,618,600
2,463,200
Allowance For Doubtful Accounts Receivable
-4,000
-10,000
-7,500
-7,800
Gross Accounts Receivable
3,633,000
2,975,000
2,626,100
2,471,000
Cash Cash Equivalents And Short Term Investments
3,071,000
2,904,000
2,578,800
2,390,000
Other Short Term Investments
557,000
635,000
1,043,600
1,254,700
Cash And Cash Equivalents
2,514,000
2,269,000
1,535,200
1,135,300
Cash Equivalents
494,000
476,100
Cash Financial
1,041,200
659,200
Cash Flow
2026
2025
2024
2023
2022
Free Cash Flow
4,113,000
3,469,000
3,101,000
2,631,200
Repurchase Of Capital Stock
-1,000,000
0
-567,000
-272,700
Repayment Of Debt
-160,000
-966,000
-1,033,000
-1,692,000
Issuance Of Debt
10,000
0
0
0
Capital Expenditure
-440,000
-247,000
-157,000
-146,300
Interest Paid Supplemental Data
0
2,000
6,000
20,200
Income Tax Paid Supplemental Data
199,000
505,000
342,000
147,100
End Cash Position
2,523,000
2,279,000
1,547,000
1,142,200
Beginning Cash Position
2,279,000
1,547,000
1,142,000
2,124,800
Effect Of Exchange Rate Changes
-3,000
0
0
Changes In Cash
247,000
732,000
405,000
-982,600
Financing Cash Flow
-1,202,000
-779,000
-1,343,000
-1,726,300
Cash Flow From Continuing Financing Activities
-1,202,000
-779,000
-1,343,000
-1,726,300
Net Other Financing Charges
-317,000
-184,000
-26,000
-20,400
Proceeds From Stock Option Exercised
265,000
371,000
283,000
258,800
Net Common Stock Issuance
-1,000,000
0
-567,000
-272,700
Common Stock Payments
-1,000,000
0
-567,000
-272,700
Net Issuance Payments Of Debt
-150,000
-966,000
-1,033,000
-1,692,000
Net Short Term Debt Issuance
-160,000
-966,000
-1,033,000
-1,692,000
Short Term Debt Payments
-160,000
-966,000
-1,033,000
-1,692,000
Net Long Term Debt Issuance
10,000
0
0
-1,692,000
Long Term Debt Payments
-1,033,700
-1,692,000
-600
Long Term Debt Issuance
10,000
0
0
0
Investing Cash Flow
-3,104,000
-2,205,000
-1,510,000
-2,033,800
Cash Flow From Continuing Investing Activities
-3,104,000
-2,205,000
-1,510,000
-2,033,800
Net Investment Purchase And Sale
1,999,000
-904,000
-742,000
-1,683,000
Sale Of Investment
5,693,000
2,792,000
2,809,000
3,777,400
Purchase Of Investment
-3,694,000
-3,696,000
-3,551,000
-5,460,400
Net Business Purchase And Sale
-4,663,000
-1,054,000
-611,000
-204,500
Purchase Of Business
-4,663,000
-1,054,000
-611,000
-204,500
Net PPE Purchase And Sale
-440,000
-247,000
-157,000
-146,300
Purchase Of PPE
-440,000
-247,000
-157,000
-146,300
Operating Cash Flow
4,553,000
3,716,000
3,258,000
2,777,500
Cash Flow From Continuing Operating Activities
4,553,000
3,716,000
3,258,000
2,777,500
Change In Working Capital
579,000
923,000
909,000
550,800
Change In Other Working Capital
407,000
684,000
1,690,000
1,869,800
Change In Payables And Accrued Expense
465,000
305,000
374,000
10,600
Change In Accrued Expense
422,000
198,000
389,000
9,600
Change In Payable
43,000
107,000
-15,000
1,000
Change In Account Payable
43,000
107,000
-15,000
1,000
Change In Prepaid Assets
-139,000
88,000
-134,000
-270,600
Change In Receivables
-154,000
-154,000
-1,021,000
-1,059,000
Changes In Account Receivables
-335,000
-345,000
-155,000
-320,300
Other Non Cash Items
473,000
347,000
449,000
420,100
Stock Based Compensation
1,774,000
1,295,000
1,076,000
1,074,500
Unrealized Gain Loss On Investment Securities
562,000
0
0
Amortization Of Securities
-54,000
-41,000
-60,000
-52,200
Deferred Tax
-19,000
-350,000
-2,034,000
12,500
Deferred Income Tax
-19,000
-350,000
-2,034,000
12,500
Depreciation Amortization Depletion
855,000
343,000
284,000
282,200
Depreciation And Amortization
855,000
343,000
284,000
282,200
Depreciation
855,000
343,000
284,000
Operating Gains Losses
76,000
65,000
56,000
49,900
Net Foreign Currency Exchange Gain Loss
1,000
0
0
Gain Loss On Sale Of PPE
75,000
65,000
56,000
49,900
Net Income From Continuing Operations
307,000
1,134,000
2,578,000
439,700
2/5
Graham Score
Speculative Investor
Fails most of Graham's safety criteria. Treat with caution.
Graham's Fair Value
N/A
N/A — requires
positive EPS and positive book value per share. Check the Financials tab for earnings history.
Margin of Safety
—
Market Cap / Net Assets
N/A
Net Assets: $27.5B
Warren's Owner Earnings
$1.6B
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
2/5 — Speculative Investor
✅
Adequate Size
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
$11.5B
vs > $1.5B revenue
❌
Strong Financial Condition
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
0.87x
vs Current Ratio > 2.0x
✅
Earnings Stability
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
No loss years (4 yrs data)
vs No negative EPS years
❌
Dividend Record
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
No dividend
vs Uninterrupted dividends
❌
Earnings Growth
EPS grew from $0.64 to $0.40 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
-37.5% EPS growth
vs > 33% EPS growth
Graham's 7 Criteria — Explained
What each criterion measures and why it matters.
✅ Adequate Size — $11.5Bvs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
❌ Strong Financial Condition — 0.87xvs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
✅ Earnings Stability — No loss years (4 yrs data)vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
❌ Dividend Record — No dividendvs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
EPS grew from $0.64 to $0.40 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
These metrics estimate what PANW is worth based on fundamentals — independent of what the market prices it at.
Graham's Fair Value and NCAV are conservative floors.
EPV assumes zero growth. These are reference points, not price targets.
Net Current Asset Value
N/A
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
N/A
Per share, no-growth floor. Compare to current price.
ROIC — Return on Invested Capital
1.4%
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Cash Flow Analysis
Metric
2026
2025
2024
2023
2022
Capital Expenditure % of Net Income
143.3%
21.8%
6.1%
33.3%
N/A
Repurchase of Capital Stock
-$1.0B
$0M
-$567M
-$273M
N/A
Free Cash Flow
$4.1B▲
$3.5B▲
$3.1B▲
$2.6B•
N/A•
Warren's Owner Earnings
$1.6B
$1.7B
$3.0B
$868M
N/A
Peers & Industry
No auto-detected peers for this industry. You can manually compare PANW against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
No management data available.
Risk Analysis
PANW (PANW) fundamental analysis — Overall grade D based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: N/A. Gross profit margin: 70.4%. Operating margin: 6.1%. Net margin: 2.7%. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.