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 Margin13.5%
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 Margin12.3%
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
D
Years to Pay Off Debt0.3 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-$803M
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-$465M
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
B
Free Cash Flow$3.5B
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 Income21.7%
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$1.7B
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 Profit73.4%
Operating Margin13.5%
Net Margin12.3%
Company Info
Showing Key Metrics
Income Highlights
Metric
2025
2024
2023
2022
Gross Profit %
73.4%▼
74.3%▲
72.3%▲
68.8%
Operating Margin %
13.5%▲
8.5%▲
5.6%▲
-3.4%
Net Income %
12.3%▼
32.1%▲
6.4%▲
-4.9%
Diluted EPS
1.60▼
3.64▲
0.64▲
-0.45
Balance Sheet Highlights
Metric
2025
2024
2023
2022
Total Assets
$23.6B
$20.0B
$14.5B
$12.3B
Total Debt
$338M▼
$1.3B▼
$2.3B▼
$4.0B
Working Capital
-$465M▲
-$833M▲
-$1.7B▲
-$1.9B
Years to Pay Debt
0.30
0.52
5.16
-14.80
Cash Flow Highlights
Metric
2025
2024
2023
2022
Free Cash Flow
$3.5B▲
$3.1B▲
$2.6B▲
$1.8B
Owner Earnings
$1.7B
$3.0B
$868M
$208M
CapEx % of Net Income
21.7%
6.1%
33.3%
N/A
Income Statement
2025
2024
2023
2022
Tax Effect Of Unusual Items
-9,479
42
-1,770
378
Tax Rate For Calcs
0
0
0
0
Normalized EBITDA
1,973,800
1,276,200
876,900
93,800
Total Unusual Items
-32,800
200
-7,900
1,800
Total Unusual Items Excluding Goodwill
-32,800
200
-7,900
1,800
Net Income From Continuing Operation Net Minority Interest
1,133,900
2,577,600
439,700
-267,000
Reconciled Depreciation
343,400
283,300
282,200
282,600
Reconciled Cost Of Revenue
2,451,600
2,059,200
1,909,700
1,718,700
EBITDA
1,941,000
1,276,400
869,000
95,600
EBIT
1,597,600
993,100
586,800
-187,000
Net Interest Income
360,500
309,600
197,200
-11,800
Interest Expense
1,900
4,800
20,500
20,200
Interest Income
363,500
317,900
224,400
15,600
Normalized Income
1,157,221
2,577,442
445,830
-268,422
Net Income From Continuing And Discontinued Operation
1,133,900
2,577,600
439,700
-267,000
Total Expenses
7,978,600
7,343,600
6,505,400
5,690,300
Total Operating Income As Reported
1,242,900
683,900
387,300
-188,800
Diluted Average Shares
709,300
708,000
684,600
591,000
Basic Average Shares
662,500
638,400
606,400
591,000
Diluted EPS
0
0
0
0
Basic EPS
0
0
0
0
Diluted NI Availto Com Stockholders
1,133,900
2,577,600
439,700
-267,000
Net Income Common Stockholders
1,133,900
2,577,600
439,700
-267,000
Net Income
1,133,900
2,577,600
439,700
-267,000
Net Income Including Noncontrolling Interests
1,133,900
2,577,600
439,700
-267,000
Net Income Continuous Operations
1,133,900
2,577,600
439,700
-267,000
Tax Provision
461,800
-1,589,300
126,600
59,800
Pretax Income
1,595,700
988,300
566,300
-207,200
Other Income Expense
-7,700
-5,200
-18,200
-6,600
Other Non Operating Income Expenses
25,100
-5,400
-10,300
-8,400
Gain On Sale Of Security
-32,800
200
-7,900
1,800
Net Non Operating Interest Income Expense
360,500
309,600
197,200
-11,800
Total Other Finance Cost
1,100
3,500
6,700
7,200
Interest Expense Non Operating
1,900
4,800
20,500
20,200
Interest Income Non Operating
363,500
317,900
224,400
15,600
Operating Income
1,242,900
683,900
387,300
-188,800
Operating Expense
5,527,000
5,284,400
4,595,700
3,971,600
Research And Development
1,984,100
1,809,400
1,604,000
1,417,700
Selling General And Administration
3,542,900
3,475,000
2,991,700
2,553,900
Selling And Marketing Expense
3,100,200
2,794,500
2,544,000
2,148,900
General And Administrative Expense
442,700
680,500
447,700
405,000
Other Gand A
442,700
680,500
447,700
405,000
Salaries And Wages
465,700
422,800
Gross Profit
6,769,900
5,968,300
4,983,000
3,782,800
Cost Of Revenue
2,451,600
2,059,200
1,909,700
1,718,700
Total Revenue
9,221,500
8,027,500
6,892,700
5,501,500
Operating Revenue
9,221,500
8,027,500
6,892,700
5,501,500
Balance Sheet
2025
2024
2023
2022
Ordinary Shares Number
667,900
650,200
616,600
597,600
Share Issued
667,900
650,200
616,600
597,600
Net Debt
856,200
1,558,300
Total Debt
338,200
1,344,400
2,270,700
3,952,900
Tangible Book Value
2,495,100
1,444,700
-1,493,800
-2,922,200
Invested Capital
7,824,400
6,133,600
3,739,900
3,886,800
Working Capital
-465,200
-833,000
-1,689,500
-1,891,400
Net Tangible Assets
2,495,100
1,444,700
-1,493,800
-2,922,200
Capital Lease Obligations
338,200
380,500
279,200
276,100
Common Stock Equity
7,824,400
5,169,700
1,748,400
210,000
Total Capitalization
7,824,400
5,169,700
1,748,400
210,000
Total Equity Gross Minority Interest
7,824,400
5,169,700
1,748,400
210,000
Stockholders Equity
7,824,400
5,169,700
1,748,400
210,000
Gains Losses Not Affecting Retained Earnings
48,400
-1,600
-43,200
-55,600
Other Equity Adjustments
48,400
-1,600
-43,200
-55,600
Retained Earnings
2,484,100
1,350,200
-1,227,400
-1,667,100
Capital Stock
5,291,900
3,821,100
3,019,000
1,932,700
Common Stock
5,291,900
3,821,100
3,019,000
1,932,700
Total Liabilities Net Minority Interest
15,751,800
14,821,200
12,752,700
12,043,600
Total Non Current Liabilities Net Minority Interest
7,763,800
7,138,500
5,015,200
3,737,300
Other Non Current Liabilities
886,800
430,900
86,100
108,400
Non Current Deferred Liabilities
6,538,800
6,327,100
4,649,900
3,352,800
Non Current Deferred Revenue
6,449,700
5,939,400
4,621,800
3,352,800
Non Current Deferred Taxes Liabilities
89,100
387,700
28,100
Long Term Debt And Capital Lease Obligation
338,200
380,500
279,200
276,100
Long Term Capital Lease Obligation
338,200
380,500
279,200
276,100
Current Liabilities
7,988,000
7,682,700
7,737,500
8,306,300
Current Deferred Liabilities
6,302,200
5,541,100
4,674,600
3,641,200
Current Deferred Revenue
6,302,200
5,541,100
4,674,600
3,641,200
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
607,600
554,700
548,300
461,100
Payables And Accrued Expenses
1,078,200
623,000
523,100
527,200
Current Accrued Expenses
846,000
506,700
390,800
399,200
Payables
232,200
116,300
132,300
128,000
Accounts Payable
232,200
116,300
132,300
128,000
Total Assets
23,576,200
19,990,900
14,501,100
12,253,600
Total Non Current Assets
16,053,400
13,141,200
8,453,100
5,838,700
Other Non Current Assets
421,800
352,900
321,700
312,600
Non Current Deferred Assets
3,010,100
2,961,000
570,200
550,100
Non Current Deferred Taxes Assets
2,424,200
2,399,000
23,100
Non Current Accounts Receivable
1,002,300
1,182,100
653,300
192,100
Investments And Advances
5,555,600
4,173,200
3,047,900
1,051,900
Investmentin Financial Assets
5,555,600
4,173,200
3,047,900
1,051,900
Available For Sale Securities
5,555,600
4,173,200
3,047,900
1,051,900
Goodwill And Other Intangible Assets
5,329,300
3,725,000
3,242,200
3,132,200
Other Intangible Assets
762,700
374,900
315,400
384,500
Goodwill
4,566,600
3,350,100
2,926,800
2,747,700
Net PPE
734,300
747,000
617,800
599,800
Accumulated Depreciation
-638,600
-559,200
-528,300
-469,700
Gross PPE
1,372,900
1,306,200
1,146,100
1,069,500
Leases
324,700
274,000
268,900
249,300
Other Properties
393,700
430,300
310,200
283,600
Machinery Furniture Equipment
567,300
514,700
479,800
449,400
Land And Improvements
87,200
87,200
87,200
87,200
Current Assets
7,522,800
6,849,700
6,048,000
6,414,900
Other Current Assets
520,500
557,400
466,800
208,900
Current Deferred Assets
419,500
369,000
339,200
317,700
Prepaid Assets
466,800
208,900
Receivables
3,679,600
3,344,500
2,852,000
2,253,800
Other Receivables
714,600
725,900
388,800
111,300
Accounts Receivable
2,965,000
2,618,600
2,463,200
2,142,500
Allowance For Doubtful Accounts Receivable
-9,700
-7,500
-7,800
-8,900
Gross Accounts Receivable
2,974,700
2,626,100
2,471,000
2,151,400
Cash Cash Equivalents And Short Term Investments
2,903,200
2,578,800
2,390,000
3,634,500
Other Short Term Investments
634,600
1,043,600
1,254,700
1,516,000
Cash And Cash Equivalents
2,268,600
1,535,200
1,135,300
2,118,500
Cash Equivalents
494,000
476,100
Cash Financial
1,041,200
659,200
Cash Flow
2025
2024
2023
2022
Free Cash Flow
3,469,800
3,100,800
2,631,200
1,791,900
Repurchase Of Capital Stock
0
-566,700
-272,700
-892,300
Repayment Of Debt
-965,600
-1,033,700
-1,692,000
-600
Capital Expenditure
-246,200
-156,800
-146,300
-192,800
Interest Paid Supplemental Data
1,700
5,600
20,200
20,200
Income Tax Paid Supplemental Data
505,500
342,300
147,100
34,600
End Cash Position
2,279,200
1,546,800
1,142,200
2,124,800
Beginning Cash Position
1,546,800
1,142,200
2,124,800
1,880,100
Changes In Cash
732,400
404,600
-982,600
244,700
Financing Cash Flow
-778,900
-1,343,100
-1,726,300
-806,600
Cash Flow From Continuing Financing Activities
-778,900
-1,343,100
-1,726,300
-806,600
Net Other Financing Charges
-183,800
-26,600
-20,400
-50,300
Proceeds From Stock Option Exercised
370,500
283,900
258,800
136,600
Net Common Stock Issuance
0
-566,700
-272,700
-892,300
Common Stock Payments
0
-566,700
-272,700
-892,300
Net Issuance Payments Of Debt
-965,600
-1,033,700
-1,692,000
-600
Net Short Term Debt Issuance
-965,600
-1,033,700
-1,692,000
-600
Short Term Debt Payments
-965,600
-1,033,700
-1,692,000
-600
Net Long Term Debt Issuance
-1,033,700
-1,692,000
-600
Long Term Debt Payments
-1,033,700
-1,692,000
-600
Investing Cash Flow
-2,204,700
-1,509,900
-2,033,800
-933,400
Cash Flow From Continuing Investing Activities
-2,204,700
-1,509,900
-2,033,800
-933,400
Net Investment Purchase And Sale
-904,100
-742,500
-1,683,000
-703,600
Sale Of Investment
2,791,800
2,808,800
3,777,400
1,568,100
Purchase Of Investment
-3,695,900
-3,551,300
-5,460,400
-2,271,700
Net Business Purchase And Sale
-1,054,400
-610,600
-204,500
-37,000
Purchase Of Business
-1,054,400
-610,600
-204,500
-37,000
Net PPE Purchase And Sale
-246,200
-156,800
-146,300
-192,800
Purchase Of PPE
-246,200
-156,800
-146,300
-192,800
Operating Cash Flow
3,716,000
3,257,600
2,777,500
1,984,700
Cash Flow From Continuing Operating Activities
3,716,000
3,257,600
2,777,500
1,984,700
Change In Working Capital
922,800
910,300
550,800
523,900
Change In Other Working Capital
683,100
1,691,300
1,869,800
1,511,200
Change In Payables And Accrued Expense
305,600
373,300
10,600
54,800
Change In Accrued Expense
198,800
388,300
9,600
-14,500
Change In Payable
106,800
-15,000
1,000
69,300
Change In Account Payable
106,800
-15,000
1,000
69,300
Change In Prepaid Assets
88,300
-134,100
-270,600
-110,000
Change In Receivables
-154,200
-1,020,200
-1,059,000
-932,100
Changes In Account Receivables
-345,300
-154,300
-320,300
-902,000
Other Non Cash Items
346,400
449,500
420,100
369,300
Stock Based Compensation
1,295,100
1,075,400
1,074,500
1,011,100
Amortization Of Securities
-41,100
-60,100
-52,200
13,500
Deferred Tax
-349,900
-2,033,700
12,500
-3,100
Deferred Income Tax
-349,900
-2,033,700
12,500
-3,100
Depreciation Amortization Depletion
343,400
283,300
282,200
282,600
Depreciation And Amortization
343,400
283,300
282,200
282,600
Operating Gains Losses
65,400
55,300
49,900
54,400
Gain Loss On Sale Of PPE
65,400
55,300
49,900
54,400
Net Income From Continuing Operations
1,133,900
2,577,600
439,700
-267,000
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: $7.8B
Warren's Owner Earnings
$1.7B
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.
$9.2B
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.
0.94x
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.
1 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 $1.60 over 2 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.
+150.0% EPS growth
vs > 33% EPS growth
Graham's 7 Criteria — Explained
What each criterion measures and why it matters.
✅ Adequate Size — $9.2Bvs > $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 — 0.94xvs 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 — 1 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 $1.60 over 2 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
6.3%
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
2025
2024
2023
2022
Capital Expenditure % of Net Income
21.7%
6.1%
33.3%
N/A
Repurchase of Capital Stock
$0M
-$567M
-$273M
-$892M
Free Cash Flow
$3.5B▲
$3.1B▲
$2.6B▲
$1.8B•
Warren's Owner Earnings
$1.7B
$3.0B
$868M
$208M
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 B based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: N/A. Gross profit margin: 73.4%. Operating margin: 13.5%. Net margin: 12.3%. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
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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
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