NASDAQ · Technology

Palo Alto Networks, Inc.

PANW · Software - Infrastructure

$184.72

▲ 3.63 (2.0%)

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Mr. Market is currently offering Palo Alto Networks, Inc. at $184.72.

The business passes only 2 of 7 of Graham's defensive criteria — well below his required standard.

Overall Grade

Defensive

Enterprising

Profitability B

Gross Profit Margin 73.4%

Operating Margin 13.5%

Net Income Margin 12.3%

Fin. Health C

Years to Pay Off Debt 0.3 yrs

Working Capital -$465M

Valuation F

Margin of Safety 0.0%

Price-to-Book 19.15x

Cash Flow B

Free Cash Flow $3.5B

CapEx % of Net Income 21.7%

Owner Earnings $1.7B

2/7

Graham Score

Speculative

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

Market Data

Market Cap $149.8B

Enterprise Value $143.7B

P/E (TTM) 103.20

Dividend Yield N/A

Exchange NASDAQ

Key Margins

Gross Profit 73.4%

Operating Margin 13.5%

Net Margin 12.3%

Company Info

Sector Technology

Industry Software - Infrastructure

Employees 17027

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Palo Alto Networks, Inc. at $184.72.

The business passes only 2 of 7 of Graham's defensive criteria — well below his required standard.

At $184.72, the stock trades at a 891% premium to its Graham Number of $18.64. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

About Palo Alto Networks, Inc.

Palo Alto Networks, Inc. provides cybersecurity solutions in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. It offers Prisma Access, a secure access service edge solution; Strata Cloud Manager, a network security management solution; and Prisma AIRS to protect customers' entire AI ecosystem. It provides a comprehensive cloud native application protection platform; and Code to Cloud platform, as well as offers VM-Series and CN-Series virtual firewalls for inline network security on multi- and hybrid-cloud environments. It provides security operation solutions through the Cortex platform that includes Cortex XSIAM, an AI-driven security operations platform; Cortex XDR to prevent, detect, and respond to cybersecurity attacks; and Cortex XSOAR for security orchestration, automation, and response; and Cortex Xpanse for attack surface management, as well as offers threat intelligence and advisory services under the Unit 42 name. It provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection, DNS security, Internet of Things security, SaaS security API, and SaaS security inline; and threat intelligence, data loss prevention, services to resolve network disruptions, and sensitive data protection. It offers professional services, including architecture design and planning, implementation, configuration, and firewall migration; education services, such as certifications, as well as online and in-classroom training; and support services. It sells its products and services through its channel partners, as well as directly to enterprises, service providers, and government entities operating in various industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications. The company was incorporated in 2005 and is headquartered in Santa Clara, California.

Showing Key Metrics

Income Highlights

Metric	2025	2024	2023	2022	2021
Gross Profit %	73.4% ▼	74.3%	72.3%	68.8%	N/A
Operating Margin %	13.5% ▲	8.5%	5.6%	-3.4%	N/A
Net Income %	12.3% ▼	32.1%	6.4%	-4.9%	N/A
Diluted EPS	1.60 ▼	3.64	0.64	-0.45	N/A

Balance Sheet Highlights

Metric	2025	2024	2023	2022	2021
Total Assets	$23.6B	$20.0B	$14.5B	$12.3B	N/A
Total Debt	$338M ↓	$1.3B	$2.3B	$4.0B	N/A
Working Capital	-$465M ▲	-$833M	-$1.7B	-$1.9B	N/A
Years to Pay Debt	0.30	0.52	5.16	-14.80	N/A

Cash Flow Highlights

Metric	2025	2024	2023	2022	2021
Free Cash Flow	$3.5B ▲	$3.1B	$2.6B	$1.8B	N/A
Owner Earnings	$1.7B	$3.0B	$868M	$208M	N/A
CapEx % of Net Income	21.7%	6.1%	33.3%	N/A	N/A

Income Statement

	2025	2024	2023	2022	2021
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	398,800
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	2021
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	1,351,800
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
Other Equity Interest					129,100
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
Long Term Debt					1,668,100
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	1,557,900
Current Debt		963,900	1,991,500	3,676,800	1,557,900
Other Current Borrowings		963,900	1,991,500	3,676,800	1,557,900
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	229,300
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	2021
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	-900
Long Term Debt Payments		-1,033,700	-1,692,000	-600	-900
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
Depreciation					304,900
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

These metrics estimate what Palo Alto Networks, Inc. is worth based on its fundamentals — independent of what the market currently prices it at. Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles. EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.

Graham's Fair Value

$18.64

Margin of Safety

Market Cap ÷ Company Value

1.00

P/B Ratio

19.15

Warren's Owner Earnings

$1.7B

Latest fiscal year

Graham's 7 Criteria

Defensive Investor Checklist

2/7 — Speculative Investor

✅ Adequate Size

$9.2B

vs > $1.5B revenue

❌ Strong Financial Condition

0.94x

vs Current Ratio > 2.0x

❌ Earnings Stability

1 loss years (4 yrs data)

vs No negative EPS years

❌ Dividend Record

No dividend

vs Uninterrupted dividends

✅ Earnings Growth

+150.0% EPS growth

vs > 33% EPS growth

❌ Moderate P/E Ratio

103.2x

vs P/E ≤ 15.0x

❌ Moderate Price-to-Book

19.15x P/B (P/E×P/B: 1975.8)

vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5

Net Current Asset Value

$-10.15

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.

"Buy at two-thirds of net current assets." — Graham

Earnings Power Value

$17.03

Per share, no-growth floor. Compare to current price.

Cash Flow Analysis

Metric	2025	2024	2023	2022	2021
Capital Expenditure % of Net Income	21.7%	6.1%	33.3%	N/A	N/A
Repurchase of Capital Stock	$0M	-$567M	-$273M	-$892M	N/A
Free Cash Flow	$3.5B ▲	$3.1B ▲	$2.6B ▲	$1.8B •	N/A •
Warren's Owner Earnings	$1.7B	$3.0B	$868M	$208M	N/A

Peers & Industry

No auto-detected peers for Software - Infrastructure. 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

Capital Allocation & Alignment

Insider Ownership

0.79%

Low — management has little skin in the game

Return on Equity (ROE)

14.5%

Adequate — returns are moderate

Return on Assets (ROA)

4.8%

Fair — average asset utilization

Debt Trend YoY

-74.8% YoY

Debt is declining — management is deleveraging

Leadership Team

Nikesh Arora

Chairman & CEO

Age 57

Pay: $4,878,498

0.430% of net income

William Jenkins Jr.

President

Age 59

Pay: $1,667,655

0.147% of net income

Nir Zuk

Founder Emeritus & Advisor

Age 53

Pay: $854,884

0.075% of net income

Dipak Golechha

Executive VP & CFO

Age 51

Pay: $1,321,720

0.117% of net income

Yuming Mao

Founder & Chief Architect

Top Institutional Holders

Institution	% Owned	Shares
Vanguard Group Inc	69.74%	67,929,063
Blackrock Inc.	61.15%	59,562,981
Morgan Stanley	31.27%	30,462,984
State Street Corporation	31.14%	30,331,705
Bank of America Corporation	19.89%	19,375,486
Geode Capital Management, LLC	16.42%	15,989,257
JPMORGAN CHASE & CO	11.81%	11,503,089
UBS Group AG	9.07%	8,836,576

Risk Analysis

Beta (Market Risk)

0.77

Low volatility — more stable than the market

Short Interest

3.2% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.05x

Conservative balance sheet — low financial risk

Current Ratio

1.04x

Adequate liquidity

52-Week Price Range

Low: $139.57 Current: $184.72 High: $223.61

Currently at 54% of 52-week range

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