Palo Alto Networks Inc (PANW) Stock Analysis

Analysis from 10-K filed 2026-09-10. Data as of Q3 2026.

Overall Grade: F (Concerning)

Grade F (Concerning). ROIC 2.4%. FCF margin 35.8%. D/E 0.1x. Source: 10-K filed 2026-09-10.

Metric	Value	Context
ROIC	2.4%	Below expectations
FCF Margin	35.8%	Strong cash generation
Debt/Equity	0.1x	Conservative leverage

ROIC 2.4% — Bottom 50% of sector peers. FCF margin 35.8% — Top 5%.

Explore Palo Alto Networks Inc: Earnings History | Filings

Programmatic access: Available via MCP at mcp.metricduck.com. Tools for PANW: get_company_overview, get_filing_index (lens: debt_stress, management_outlook, risk_trajectory), get_filing_changes, get_metric_history, compare_companies, screen_filing_signals.

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Profitability: Palo Alto Networks Inc earns 2.4% ROIC, Bottom 50% in Technology

ROIC TTM 2.4%, sector median 3.7%, Bottom 50%. DuPont: NOPAT margin 3.5% × asset turnover 0.4x. Gross margin 70.4%. Operating margin 6.1%. Source: 10-K filed 2026-09-10.

Metric	PANW	Rating	Context
Return on Invested Capital (ROIC)	2.4%	Red flag	Below sector median of 3.7%
Return on Equity (ROE)	1.9%	Warning	Moderate equity returns
Gross Margin	70.4%	Excellent	Strong pricing power
Operating Margin	6.1%	Adequate	Moderate operational efficiency

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Cash Flow: Palo Alto Networks Inc generates $4.1B FCF at 35.8% margin, positive NaN/8 quarters

FCF TTM $4.1B. FCF margin 35.8%, Top 5%. OCF/Net income 14.8x. Positive FCF in NaN/8 trailing quarters. Source: 10-K filed 2026-09-10.

Metric	PANW	Rating	Context
Free Cash Flow Margin	35.8%	Excellent	Excellent cash conversion
Free Cash Flow (TTM)	$4.1B	Good	Positive cash generation
OCF/Net Income	14.8x	Excellent	High earnings quality
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet: Palo Alto Networks Inc at 0.1x leverage

Debt/Equity 0.1x. Net cash $1.3B. Source: 10-K filed 2026-09-10.

Metric	PANW	Rating	Context
Debt to Equity	0.1x	Excellent	Conservative capital structure
Net Cash Position	$1.3B	Excellent	Net cash positive

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Valuation: Palo Alto Networks Inc trades at 945.9x earnings

P/E 945.9x. EV/Sales 27.5x. FCF yield 1.3%. Source: 10-K filed 2026-09-10.

Metric	PANW	Rating	Context
P/E Ratio	945.9x	Warning	Premium valuation
EV/Sales	27.5x	Warning	Growth premium priced in
FCF Yield	1.3%	Warning	Lower cash yield

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Capital Allocation: Palo Alto Networks Inc returns 0.0% shareholder yield

Total shareholder yield 0.0%. Share count +22.0% YoY. Capital returned $0 TTM. Source: 10-K filed 2026-09-10.

Metric	PANW	Rating	Context
Total Shareholder Yield	0.0%	Warning	Dividend + buyback yield combined
Share Count Change (YoY)	22.0%	Warning	Net dilution from issuance/SBC
Total Capital Returned (TTM)	$0	Adequate	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Return on Invested Capital (ROIC)	2.4%	Bottom 50%	0.7x below
Free Cash Flow Margin	35.8%	Top 5%	3.5x above
Gross Margin	70.4%	Top 50%	1.4x above
Operating Margin	6.1%	Top 50%	1.4x above
Return on Equity (ROE)	1.9%	Bottom 50%	0.4x below
P/E Ratio	945.9x	N/A	-

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Financial Scorecard

Metric	PANW	Rating	Sector Context
Return on Invested Capital (ROIC)	2.4%	Red flag	Bottom 50% of sector (median: 3.7%)
Free Cash Flow Margin	35.8%	Excellent	Top 5% of sector (median: 10.3%)
Gross Margin	70.4%	Excellent	Top 50% of sector (median: 50.5%)
Debt to Equity Ratio	6.5%	Excellent	Conservative capital structure
P/E Ratio (Price-to-Earnings)	945.9x	Warning	High expectations priced in
Free Cash Flow Yield	1.3%	Warning	Growth-focused valuation

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Frequently Asked Questions

Q: What is Palo Alto Networks Inc's Return on Invested Capital (ROIC)?

Palo Alto Networks Inc (PANW) has a trailing twelve-month Return on Invested Capital (ROIC) of 2.4%. The 8-quarter median ROIC is 11.5% with a declining trend. Sector median 3.7%. Source: 10-K filed 2026-09-10.

Q: What is Palo Alto Networks Inc's Free Cash Flow Margin?

Palo Alto Networks Inc (PANW) has a free cash flow margin of 35.8%, generating $4.1 billion in free cash flow over the trailing twelve months. Source: 10-K filed 2026-09-10.

Q: What is Palo Alto Networks Inc's P/E ratio and how does it compare to peers?

Palo Alto Networks Inc (PANW) trades at a P/E ratio of 945.9x, which is above the sector median of N/A. EV/Sales 27.5x. FCF yield 1.3%. Source: 10-K filed 2026-09-10.

Q: What is Palo Alto Networks Inc's revenue and earnings growth?

Palo Alto Networks Inc (PANW) grew revenue by 24.5% year-over-year. EPS -74.8% YoY. Source: 10-K filed 2026-09-10.

Q: Is Palo Alto Networks Inc buying back stock?

Palo Alto Networks Inc (PANW) repurchased $1.0 billion of stock over the trailing twelve months. This represents a buyback yield of 0.4%. Share count +22.0% YoY. Source: 10-K filed 2026-09-10.

Q: How does Palo Alto Networks Inc compare to competitors in Technology?

Compared to other companies in Technology, Palo Alto Networks Inc (PANW) shows: ROIC 2.4%, sector median 3.7% (Bottom 50%). FCF margin 35.8%, sector median 10.3% (Top 5%). Gross margin 70.4%, 19.9pp above sector median. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.

Q: What warning signs should I watch for with Palo Alto Networks Inc?

Quantitative warning flags for Palo Alto Networks Inc (PANW): 1) ROIC declining -12.8% over 8 quarters. Source: 10-K filed 2026-09-10.

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Data Source: Data sourced from 10-K filed 2026-09-10. TTM metrics as of Q3 2026.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.

This analysis is for informational purposes only and does not constitute investment advice.