Company Overview
Palo Alto Networks sells cybersecurity software and services aimed at protecting networks, cloud environments, and endpoints. The business is built around security platforms that organizations use to prevent, detect, and respond to threats across their IT footprint. It operates at large scale, with a market value around USD 120 billion. The stock trades on NASDAQ.
Analysis of recent data
FundamentalsFor the year ended July 31, 2025, reported in USD, revenue reached USD 9.2 billion, with EBIT of USD 1.2 billion and net income of USD 1.1 billion. Gross margin was 73.50%, while operating margin came in at 14.37% and net profit margin at 12.96%.
On the capital-return side, ROE over the trailing twelve months was 15.49%. Cash on the balance sheet stood at USD 2.3 billion, and the cash flow proxy was USD 1.3 billion, with depreciation and amortization of USD 343.4 million. Revenue grew 14.9% versus the prior annual period.
Valuation
DCF / MultiplesAt USD 147.02, the share price sits above the DCF’s central estimate of USD 98.91, while still below the upper end of the range at USD 196.83 and well above the lower end at USD 43.75. The trailing multiples are elevated, with a 93.59 P/E and 59.09 EV/EBITDA.
Conclusion
TakeawayThe price assumes a lot from the business over time. Returns on capital need to keep improving to justify it. Margins and cash generation have to keep compounding. If returns stall, the valuation can compress quickly.