Stock analysis · Bull Rankings model

PANW analysis

Palo Alto Networks, Inc.Software - Infrastructure. Scored on the same transparent model behind the daily rankings.

Cybersecurity
PANW
Palo Alto Networks, Inc. · Software - Infrastructure
FCF$3.8bB
Rev+19.5%B+
D/E0.08B+
P/S25.0xD
PEG3.52D
41.1Score
$325.68$265.4B
1Y Target$336.70Analyst consensus · 50 analysts
5Y Target$588.89Compound horizon
10Y Target$1,493Long-dated conviction
FCF$3.8bTTM
B
FCF $3.8b — solid, comfortably covers operations and capital return
Rev+19.5%TTM YoY
B+
Revenue +19.5% — above sector median, healthy trajectory
D/E0.08
B+
D/E 0.08 — below the Technology debt median (≈40th pctile)
P/S25.0x
D
P/S 25.0x — most expensive decile in Technology (≈95th pctile)
PEG3.52
D
PEG 3.52 — very expensive; pricing in best-case scenarios

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 41.1
Quality0.50
Growth0.99
Value0.14
Why this score
  • Diluting shareholders
Entry · Margin of safety
52-week rangeNear 52-week high
12% off the 12-month high
vs DCF fair value283% aboveest. fair value ~$85
What the price assumes: free cash flow compounding at ~41% a year for the next decade — vs the ~9% a year our model projects from current growth and analyst estimates.
Quality signals · context only
Gross profitability16% · C+gross profit ÷ total assets (Novy-Marx)
ROIC2.7% · Creturn on invested capital — not score-weighted
Why now
Software - Infrastructure · market cap $265.4b. 12% off the 52-week high of $368.80. Revenue growing +20%, comfortably above the S&P median. 50 sell-side analysts rate this a Buy with a mean 1-yr target of $336.70 (implying +3% upside).
Moat
Free cash flow runs well ahead of reported net income — non-cash charges (depreciation, intangible amortization) are holding down GAAP earnings while cash generation stays strong. $265.4b market cap places it among the largest companies in the sector — distribution, R&D, and customer-acquisition costs amortize across a base peers can't replicate. Software economics — recurring revenue, embedded customer workflows, and high gross margin all compound the moat once a base account is won. Switching costs are the lever.
Risk
P/S 25.0x embeds aggressive forward growth — disappointing top-line guidance would compress the multiple hard. ROE 3% is below the long-run sustainable threshold of ~10% — capital efficiency would need to improve for the equity base to compound at the market rate. Software — competitive moat is durable until it isn't; watch net revenue retention, gross margin trends, and any new market entrant with a fundamentally lower price point.
Horizon
1-3 yr $336.70 (50-analyst consensus) — catalyst-driven; binary events dominate. 5 yr $588.89 — requires the platform / technology to reach commercial scale. 10 yr $1,493 — return distribution heavily skewed.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
Trend
+1.2 over 31 daily scores
From 39.9 (Jun 22) → 41.1 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Shares to buy
6
Position size
$1,954
3.9% of portfolio
Stop price
$244.26
25% below $325.68
$ at risk if stopped
$488.52
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

Palo Alto Networks, Inc. (PANW): score, valuation & FAQ

Palo Alto Networks, Inc. (PANW) is a Software - Infrastructure company that scores 41.1 out of 100 on the Bull Rankings quality-growth model — a below-average reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are Rev (B+) and D/E (B+), while P/S (D) and PEG (D) rate weaker. On valuation, PANW sits about 283% above our discounted-cash-flow fair value — the current price implies roughly 41% annual free-cash-flow growth over the next decade.

Is PANW a good stock to buy?

Bull Rankings scores PANW 41.1 out of 100 on its quality-growth model, which is a below-average reading. That is driven by Rev (B+) and D/E (B+). A score is a quantitative screen of Palo Alto Networks, Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does PANW score 41.1 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). PANW earns its highest marks on Rev (B+) and D/E (B+), and is held back by P/S (D) and PEG (D). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is PANW overvalued or undervalued?

Based on $325.68, PANW sits about 283% above our discounted-cash-flow fair value — the current price implies roughly 41% annual free-cash-flow growth over the next decade. Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in PANW?

P/S 25.0x embeds aggressive forward growth — disappointing top-line guidance would compress the multiple hard. ROE 3% is below the long-run sustainable threshold of ~10% — capital efficiency would need to improve for the equity base to compound at the market rate. Software — competitive moat is durable until it isn't; watch net revenue retention, gross margin trends, and any new market entrant with a fundamentally lower price point.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.

More Software stocks by score

All Technology rankings →

Analyze another ticker →