Stock Analysis on Net

Palo Alto Networks Inc. (NASDAQ:PANW)

$24.99

Price to Operating Profit (P/OP)
since 2012

Microsoft Excel

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Calculation

Palo Alto Networks Inc., P/OP, long-term trends, calculation

Microsoft Excel

Based on: 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31), 10-K (reporting date: 2017-07-31), 10-K (reporting date: 2016-07-31), 10-K (reporting date: 2015-07-31), 10-K (reporting date: 2014-07-31), 10-K (reporting date: 2013-07-31), 10-K (reporting date: 2012-07-31).

1 US$

2 Data adjusted for splits and stock dividends.

3 Closing price as at the filing date of Palo Alto Networks Inc. Annual Report.


The analysis of the financial data reveals several notable trends over the analyzed period.

Share Price
The share price demonstrates substantial growth over the years. Starting at $10.96 in October 2012, it experienced fluctuations in the early years, including a dip to $7.72 in September 2013, followed by a steady increase until 2015 where it peaked at $30.72. Despite a slight decline in 2016 and 2017, the price resumed an upward trajectory afterward. Significant growth is observed from 2020 onward, approximately doubling from $39.28 to $78.04 in 2021, then continuing to rise to $167.91 by September 2024. This indicates strong market confidence and value appreciation over the long term.
Operating Profit Per Share
The operating profit per share was negative for most periods between 2012 and 2021, reflecting operating losses per share. The figure started close to zero at $0.01 in 2012 but dropped to -$0.45 by 2014, with subsequent years showing continued negative values, fluctuating between approximately -$0.09 and -$0.52. There is a marked shift in the most recent years: operating profit per share turned positive in 2023 at $0.63 and increased further to $1.05 in 2024. This trend suggests an improvement in operational efficiency or profitability leading to sustainable profits on a per-share basis.
Price-to-Operating Profit (P/OP) Ratio
The P/OP ratio is sparsely available due to the previously negative operating profits. However, for the available years, it was extraordinarily high at 1147.44 in 2012, indicating the share price vastly exceeded operating profits. More recent values from 2023 and 2024 show a decline to 193.4 and 159.88, respectively, reflecting improved operating profit levels relative to the share price. This reduction in P/OP ratio suggests the market valuation is beginning to align more realistically with operational earnings.

Overall, the company appears to have transitioned from a period of operating losses to profitability, which aligns with the significant appreciation in share price observed especially in the last few years. The reduction in the P/OP ratio confirms this shift, implying a maturing business with strengthening financial performance.


Comparison to Competitors

Palo Alto Networks Inc., P/OP, long-term trends, comparison to competitors

Microsoft Excel

Based on: 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31), 10-K (reporting date: 2017-07-31), 10-K (reporting date: 2016-07-31), 10-K (reporting date: 2015-07-31), 10-K (reporting date: 2014-07-31), 10-K (reporting date: 2013-07-31), 10-K (reporting date: 2012-07-31).