Palo Alto Networks Inc. (NASDAQ:PANW)

Return on Assets (ROA)

The ROA showed a declining trend from -1.24% in 2019 to a low point of -4.87% in 2021, indicating decreased efficiency in asset utilization during that period. However, starting in 2022, ROA improved significantly, turning positive at 3.03% in 2023 and increasing further to 12.89% in 2024. This reflects a notable enhancement in profitability relative to total assets over the last two years.

Financial Leverage

Financial leverage increased sharply from 4.16 times in 2019 to an exceptionally high level of 58.35 times in 2022, suggesting a substantial rise in the use of debt relative to equity. Following this peak, leverage decreased markedly to 8.29 in 2023 and further down to 3.87 in 2024, indicating a significant reduction in reliance on debt financing towards the most recent period.

Return on Equity (ROE)

ROE experienced a pronounced downward trend from -5.16% in 2019 to a severe negative value of -127.14% in 2022, reflecting large losses or declining returns for shareholders. In contrast, from 2022 onwards, ROE showed a dramatic recovery, turning positive at 25.15% in 2023 and reaching 49.86% in 2024, signaling enhanced shareholder value creation during the latest years.

Net Profit Margin

The net profit margin exhibited a fluctuating trend over the observed periods. Initially negative at -2.82% in 2019, it worsened to -7.83% in 2020 and further declined to -11.72% in 2021. However, starting in 2022, the margin improved significantly, turning positive at 6.38% in 2023 and reaching a notably strong 32.11% in 2024. This indicates a notable shift from losses toward substantial profitability in recent years.

Asset Turnover

Asset turnover remained relatively stable with minor fluctuations. It started at 0.44 in 2019, decreased slightly to 0.38 in 2020, then recovered to 0.42 in 2021 and continued a gradual increase to 0.45 in 2022 and 0.48 in 2023. The value decreased again to 0.40 in 2024. Overall, asset utilization showed modest variability but stayed within a narrow range.

Financial Leverage

Financial leverage experienced considerable volatility. It was 4.16 in 2019 and rose sharply to 8.23 in 2020 and then to an extreme peak of 16.14 in 2021. The leverage ratio reached a very high level of 58.35 in 2022 before dropping significantly to 8.29 in 2023 and further declining to 3.87 in 2024. This suggests heightened reliance on debt or other liabilities peaking in 2022, followed by a marked reduction in leverage the subsequent two years.

Return on Equity (ROE)

Return on equity followed a volatile pattern closely linked with margin and leverage trends. ROE was negative throughout the first four years, starting at -5.16% in 2019 and becoming increasingly negative to -24.23% in 2020, -78.63% in 2021, and reaching a low point at -127.14% in 2022. A substantial recovery occurred thereafter, with ROE turning positive at 25.15% in 2023 and surging to 49.86% in 2024. The dramatic improvement in ROE coincides with the positive shift in net profit margin and the reduction in financial leverage in the latter years.

Tax Burden

The tax burden ratio is available only for the last two years, showing a notable increase from 0.78 in 2023 to 2.61 in 2024. This suggests a higher proportion of income attributed to taxes relative to earnings during these periods.

Interest Burden

Interest burden data is recorded for 2019, 2023, and 2024. In 2019, it was significantly negative at -8.02, indicating high interest expenses relative to earnings. It improved considerably in 2023 and 2024, with ratios of 0.95 and 0.99, reflecting decreased interest costs or improved earnings before interest.

EBIT Margin

The EBIT margin exhibits a downward trend from 2019 through 2021, descending from a marginal positive value of 0.32% to -7.09%. Although still negative in 2022 at -3.27%, it substantially improved in 2023 and 2024, reaching positive margins of 8.61% and 12.41% respectively. This recovery indicates enhanced operational profitability over recent years.

Asset Turnover

Asset turnover ratios display moderate fluctuations with a low of 0.38 in 2020 and a peak of 0.48 in 2023 before declining to 0.4 in 2024. Overall, the changes are relatively stable, suggesting consistent efficiency in generating revenue from assets.

Financial Leverage

Financial leverage shows marked volatility. Starting at 4.16 in 2019, it nearly doubled by 2020 to 8.23, and surged dramatically in 2022 to 58.35, indicating a significant increase in indebtedness or use of debt financing. This ratio then dropped sharply in the subsequent years to 8.29 in 2023 and 3.87 in 2024, suggesting a reduction in leverage and potentially a more conservative capital structure.

Return on Equity (ROE)

ROE trends are notably negative from 2019 through 2022, worsening from -5.16% to an extreme -127.14%, which reflects poor profitability and possible losses eroding shareholder equity. A strong turnaround occurs in 2023 and 2024 with ROE rising steeply to 25.15% and 49.86%, indicating significant improvements in generating returns for equity investors.

Net Profit Margin

The net profit margin exhibited a volatile trend over the period analyzed. Beginning with a negative margin of -2.82% in 2019, the margin deteriorated further, reaching a low of -11.72% in 2021. Subsequently, a recovery phase is evident, with the margin improving to -4.85% in 2022 and turning positive at 6.38% in 2023. The most recent figure shows a significant increase to 32.11% in 2024, indicating a strong improvement in profitability.

Asset Turnover

The asset turnover ratio, reflecting the efficiency of asset utilization, displayed relatively moderate fluctuations. It started at 0.44 in 2019, declined to 0.38 in 2020, then showed a gradual increase, peaking at 0.48 in 2023. In 2024, the ratio slightly decreased to 0.40. Overall, the ratio has remained within a narrow range, suggesting a relatively stable efficiency in using assets to generate revenue.

Return on Assets (ROA)

ROA mirrored some of the net profit margin trends, starting negative at -1.24% in 2019 and worsening to -4.87% in 2021. Thereafter, it improved steadily, moving to -2.18% in 2022 and becoming positive at 3.03% in 2023. The latest data point shows a substantial increase to 12.89% in 2024. This progression indicates enhanced operational performance and more effective asset utilization in generating returns.

The financial data reveals several notable trends over the analyzed periods.

Tax Burden

The tax burden ratio is only available for the most recent two periods, showing an increase from 0.78 in July 2023 to 2.61 in July 2024, indicating a rising impact of taxes on net income during the latest year.

Interest Burden

The interest burden ratio exhibited a significant negative value of -8.02 in July 2019, which suggests very high interest expenses or unusual financial events affecting earnings before interest and taxes. This ratio improved considerably with available data, reaching 0.95 in July 2023 and slightly increasing to 0.99 in July 2024, indicating a normalization and reduction in interest expenses relative to operating income.

EBIT Margin

The EBIT margin showed negative performance from July 2019 through July 2021, deteriorating from 0.32% to -7.09%, and then improving slightly to -3.27% in July 2022. Subsequently, the margin turned positive and grew substantially to 8.61% in July 2023 and further to 12.41% in July 2024, reflecting improved operational profitability over the most recent two years.

Asset Turnover

The asset turnover ratio indicates efficiency in utilizing assets to generate revenue. It declined from 0.44 in July 2019 to 0.38 in July 2020, followed by a gradual increase to 0.48 in July 2023, before dropping to 0.40 in July 2024. This pattern signals fluctuating asset efficiency, with a peak in mid-period but some reduced efficiency in the latest year.

Return on Assets (ROA)

The ROA experienced negative values from July 2019 through July 2022, reaching its lowest at -4.87% in July 2021. Thereafter, it turned positive in July 2023 at 3.03%, and sharply increased to 12.89% in July 2024. This trend demonstrates significant improvement in asset profitability, particularly in the last two years.

Overall, the data indicates a company transitioning from periods of losses and inefficiencies to marked improvements in profitability and financial management. The recent years notably reflect stronger operational margins, reduced interest burden, and enhanced returns on assets, although variability in asset turnover suggests some fluctuations in asset utilization efficiency.

Tax Burden

The tax burden ratio shows data only in the last two reported periods, with a significant increase from 0.78 in 2023 to 2.61 in 2024. This suggests a relatively higher tax expense or lower earnings before taxes in the most recent year, impacting the company's profitability after tax.

Interest Burden

The interest burden ratio improved markedly over the observed period. Initially, in 2019, it was highly negative at -8.02, indicating substantial interest expenses relative to earnings. However, by 2023 and 2024, the ratio had stabilized near 1.00, reflecting a reduction in interest costs or more efficient interest expense management, leading to a positive effect on operating profit.

EBIT Margin

The EBIT margin exhibited volatility, starting slightly positive at 0.32% in 2019, then declining to negative values from 2020 through 2022 (-4.2%, -7.09%, and -3.27% respectively). In 2023, there was a noticeable recovery with an EBIT margin of 8.61%, further increasing to 12.41% in 2024. This trend indicates a significant turnaround in operational profitability, reflecting enhanced earnings before interest and taxes over the most recent years.

Net Profit Margin

The net profit margin followed a similar trajectory to the EBIT margin but with more pronounced fluctuations. It was negative and worsening from 2019 through 2021 (-2.82%, -7.83%, -11.72%), showing substantial net losses during this time. A recovery began in 2022 with a margin improving to -4.85%, turning positive in 2023 at 6.38%, and surging dramatically to 32.11% in 2024. This sharp increase highlights a considerable improvement in overall profitability after all expenses, including taxes and interest, underscoring highly effective cost control and revenue growth or other favorable financial factors recently.