Palo Alto Networks

PANW

Software - Infrastructure · Technology

Price

$358.68

+4.69 (+1.32%)

Market Cap

$244.44B

Exchange

NASDAQ

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+22.6% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 578.4M (2021) → 709.3M (2025)

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 subscr

Winston Score History

Politician Trades

42 trades / 12mo

27 Congressional buys and 15 sells on PANW in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+14.9% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+48.8% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$2.0B/ year

↑ Rising (+10% vs prior year)

21.5% of revenue

In line with sector average (15%)

Investing heavily in future products and technology

Insider Activity

0.9%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$4.2B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Heavy R&D investment

Palo Alto Networks is putting 22% of revenue into R&D and that number is rising. And they're generating enough cash to self-fund it.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

73.6%

Premium pricing power — 73.6% gross margin

Operating Margin

15.4%

Healthy — 15.4% operating margin

ROCE

4.1%

Weak — 4.1% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+12.2%

Fast-growing sales (12.2% YoY)

EPS YoY

-57.1%

Earnings shrinking (-57.1% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

227%

Turns 227% of profit into real cash

FCF Margin

24.8%

Converts sales into free cash efficiently (24.8%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.04

Conservative — low debt load (0.04)

Interest Cover

678.20x

Comfortably covers interest (678.2x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

200.4x

Expensive — P/E 200.4

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+128.2

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (200.4 → 72.1)

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Dividends

Not applicable for this business.

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