Software - Infrastructure · NASDAQ
Current Price
$181.54
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Palo Alto Networks, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; Panorama, a security management solution for the control of firewall appliances and software deployed on an end-customer's network and instances in public or private cloud environments, as a virtual or a physical appliance; and virtual system upgrades, which are available as extensions to the virtual system capacity that ships with physical appliances. It also provides subscription services covering the areas of threat prevention, malware and persistent threat, uniform resource locator filtering, laptop and mobile device protection, and firewall; and DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention. In addition, the company offers cloud security, secure access, security analytics and automation, and threat intelligence and cyber security consulting; 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. Palo Alto Networks, Inc. sells its products and services through its channel partners, as well as directly to medium to large 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.
ROIC (TTM)
5.8%
ROE (TTM)
15.5%
FCF Yield
3.29%
Based on trailing twelve-month data, PANW shows a free cash flow per share of N/A and a ROIC of 5.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.29% are important context metrics when evaluating PANW's stock valuation relative to peers.
The intrinsic value of PANW depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether PANW is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $181.54. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Palo Alto Networks, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Software - Infrastructure industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PANW's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Palo Alto Networks, Inc., this means projecting how much free cash flow the Software - Infrastructure will produce over the next 5-10 years, then discounting those amounts to today's dollars. PANW's ROIC of 5.8% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PANW, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
