Palo Alto Networks, Inc. PANW

Name: PANW Crucible Score
Creator: Kaladin Capital Intelligence

TechnologySoftware - InfrastructureNASDAQ📅 Scored March 17, 2026

Price at analysis: $153.22

Crucible Score

59.7

C+

Quality × Value Composite

KQI — Quality

72.8

Fundamental Quality Index

KVI — Value

50.5

C-

Valuation Attractiveness Index

Crucible Verdict — PANW

Palo Alto Networks delivers solid operational quality with strong moat durability (78) and diversification (80), but PANW trades at a meaningful discount to its $172 fair value despite consistent execution under CEO Nikesh Arora. The 13% upside gap reflects market skepticism about cybersecurity valuations rather than fundamental weakness. Strong earnings consistency (72% beat rate) should eventually close this valuation disconnect.

— Kal, Kaladin Capital Intelligence

◆ KQI Quality Dimensions

Financial Quality

76.9

Growth Profile

59.2

Moat Durability

77.6

Management Effectiveness

69.8

Diversification & Resilience

80.0

Market Position

65.0

Weakest dimension: Growth Profile (59.2)

◆ KVI Value Dimensions

DCF Margin of Safety

64.6

FCF Yield & Cash Returns

38.3

Relative Valuation

29.8

Growth-Adjusted Value

52.5

Historical Valuation

73.0

Macro Context

32.2

◆ DCF Valuation Scenarios

Bear Case

$118.45

Base Case

$172.38

Bull Case

$241.67

Price at Analysis

$153.22

Scenario	Fair Value	Rev CAGR (5yr)	Terminal Margin	WACC
🔴 Bear	$118.45	9.0%	22.0%	9.3%
🟢 Base	$172.38	13.0%	26.0%	8.8%
🟢 Bull	$241.67	17.0%	30.0%	8.3%

Key Assumptions: Revenue growth anchored to 5-year CAGR of ~21% decelerating toward 8-17% over projection period as PANW matures in cybersecurity platform consolidation. Operating margins expand from current ~13.5% toward 22-30% terminal levels reflecting software-like scalability but tempered by ongoing R&D and go-to-market investment. FCF conversion remains strong at ~38% of revenue currently; WACC derived from CAPM with 5.5% ERP and 0.82 beta, with slight scenario adjustments reflecting execution risk.

◆ Financial Snapshot

Profitability

Gross Margin73.5%

Operating Margin14.4%

Net Margin13.0%

ROIC11.5%

ROE13.6%

Balance Sheet

Balance SheetD/E: 0.04*, CR: 1.04* (* = TTM)

Cash ConversionFCF/EPS: 3.17x

Capital IntensityCapex/Rev: 2.7%

Altman Z-Score5.22 (Safe)

Piotroski F-Score6/9 (Good)

Growth

Revenue CAGR-31.8% CAGR (suspect)

Earnings CAGR60.6% CAGR

Growth ConsistencyCV: 3.18

Segment Breadth3/3 growing (100%)

Quarterly TrendMargin↑, WC↓, Exp↓

Earnings CredibilityTends to Beat

◆ Revenue Breakdown — FY2025

By Segment

Subscription53.9%

Support26.5%

Product19.5%

By Geography

Americas67.3%

EMEA20.8%

Asia Pacific11.9%

Total Revenue

$9.2B

Fiscal Year 2025

◆ Analyst Consensus & Leadership

Analyst Price Targets

Avg Target (Last Quarter)$210.00

Analysts Covering (Quarter)23

Avg Target (Last Year)$223.50

Analysts (Year)44

Leadership & Governance

CEONikesh Arora(Founder) · 8 years

CEO Ownership1.4%

Compensation97% performance-based

Insider ActivitySelling

Capital AllocationROIC 11.5% vs WACC 0.7%

Earnings Beat Rate72% (17/22)

◆ Company Profile

Palo Alto Networks, Inc. provides cybersecurity solutions worldwide.

CEO

Nikesh Arora

Employees

15758

Headquarters

Santa Clara, CA, US

IPO Date

July 20, 2012

Exchange

NASDAQ

Website

paloaltonetworks.com

◆ Related Companies in Our Universe

Other Technology companies scored by the Crucible:

ADBE81.8A-NICE80.7A-DECK79.9A-INTU79.9A-EXEL78.3A-MTCH78.2A-TTD78.0B+

Methodology All Scores Crucible Briefs Performance @KaladinCI

Analysis conducted March 17, 2026 based on most recent SEC filings. Updated quarterly, after new SEC filings.

Point-in-time fundamental analysis. Not investment advice. Scores reflect company quality and valuation at time of analysis and may not reflect current market conditions.