Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Palo Alto Networks Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2026-07-31), 10-K (reporting date: 2025-07-31), 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).
The financial trajectory from 2021 to 2026 demonstrates a consistent expansion in cash generation capabilities, characterized by a steady increase in operational efficiency and a subsequent recovery in equity-available cash flows.
- Net Cash Provided by Operating Activities
- A sustained upward trend is evident in operating cash flows, which grew from 1,503 million USD in 2021 to a projected 4,553 million USD by 2026. This represents a continuous year-over-year increase, indicating a strong and scalable core operational model capable of generating increasing levels of liquidity.
- Free Cash Flow to Equity (FCFE) Performance
- FCFE exhibits a more volatile pattern compared to operating cash flows. While the metric grew from 1,386 million USD in 2021 to 1,791 million USD in 2022, a significant contraction occurred in 2023, where FCFE dropped to 939 million USD. Following this decline, a robust recovery is observed, with values rising to 2,067 million USD in 2024 and reaching a projected 3,963 million USD by 2026.
- Divergence Analysis (2023 Fiscal Year)
- A notable divergence occurred in 2023, where net cash from operating activities increased substantially to 2,778 million USD, yet FCFE decreased by approximately 47.5% relative to the previous year. This inverse relationship suggests a significant allocation of capital toward capital expenditures or debt repayments during this period, which temporarily reduced the cash available to equity holders despite stronger operational performance.
- Long-term Cash Flow Conversion
- From 2024 through the 2026 projections, FCFE is expected to track more closely with operating cash flows. The projected acceleration in FCFE toward 2026 suggests a transition toward higher capital efficiency and an increased capacity to return value to shareholders or fund internal growth without relying on external financing.
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Price to FCFE Ratio, Current
Palo Alto Networks Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 818,000,000 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 3,963) |
| FCFE per share | 4.84 |
| Current share price (P) | 405.57 |
| Valuation Ratio | |
| P/FCFE | 83.71 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Accenture PLC | 8.02 |
| Adobe Inc. | 8.75 |
| AppLovin Corp. | 24.00 |
| Cadence Design Systems Inc. | 61.80 |
| Datadog Inc. | 349.24 |
| International Business Machines Corp. | 14.38 |
| Intuit Inc. | 7.71 |
| Microsoft Corp. | 61.48 |
| Oracle Corp. | 26.27 |
| Palantir Technologies Inc. | 222.07 |
| Salesforce Inc. | 9.33 |
| ServiceNow Inc. | 31.45 |
| Synopsys Inc. | 6.50 |
| Workday Inc. | 15.99 |
| P/FCFE, Sector | |
| Software & Services | 40.68 |
| P/FCFE, Industry | |
| Information Technology | 64.33 |
Based on: 10-K (reporting date: 2026-07-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Palo Alto Networks Inc., historical P/FCFE calculation, comparison to benchmarks
| Jul 31, 2026 | Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 818,000,000 | 668,900,000 | 651,200,000 | 617,189,208 | 598,427,616 | 584,436,678 | |
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in millions)2 | 3,963) | 2,504) | 2,067) | 939) | 1,791) | 1,386) | |
| FCFE per share3 | 4.84 | 3.74 | 3.17 | 1.52 | 2.99 | 2.37 | |
| Share price1, 4 | 338.49 | 190.52 | 167.91 | 121.36 | 88.43 | 78.04 | |
| Valuation Ratio | |||||||
| P/FCFE5 | 69.87 | 50.89 | 52.90 | 79.75 | 29.54 | 32.91 | |
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Accenture PLC | — | 9.96 | 23.91 | 21.01 | 17.87 | 25.76 | |
| Adobe Inc. | — | 12.06 | 18.02 | 41.83 | 21.32 | 34.26 | |
| AppLovin Corp. | — | 35.43 | 45.36 | 23.30 | — | 22.51 | |
| Cadence Design Systems Inc. | — | 50.96 | 24.08 | 71.40 | 33.41 | 36.31 | |
| Datadog Inc. | — | 153.91 | 28.64 | 71.93 | 69.38 | 202.25 | |
| International Business Machines Corp. | — | 14.89 | 20.90 | 9.97 | 11.97 | 48.45 | |
| Intuit Inc. | 8.14 | 31.01 | 38.43 | 38.74 | 13.86 | 86.74 | |
| Microsoft Corp. | 45.32 | 60.89 | 42.11 | 43.32 | 36.73 | 42.54 | |
| Oracle Corp. | 30.52 | 89.42 | 48.38 | 15.47 | — | 8.36 | |
| Palantir Technologies Inc. | — | 151.45 | 256.11 | 74.28 | 96.89 | 198.12 | |
| Salesforce Inc. | 8.99 | 25.91 | 38.33 | 31.06 | 16.56 | 49.52 | |
| ServiceNow Inc. | — | 26.94 | 61.82 | 58.19 | 44.44 | 64.54 | |
| Synopsys Inc. | — | 6.21 | 63.94 | 57.04 | 33.41 | 40.55 | |
| Workday Inc. | 13.98 | 29.52 | 36.59 | 19.79 | 49.17 | 40.57 | |
| P/FCFE, Sector | |||||||
| Software & Services | — | 40.23 | 39.55 | 32.87 | 31.24 | 34.11 | |
| P/FCFE, Industry | |||||||
| Information Technology | — | 45.06 | 36.66 | 33.12 | 26.68 | 27.39 | |
Based on: 10-K (reporting date: 2026-07-31), 10-K (reporting date: 2025-07-31), 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).
1 Data adjusted for splits and stock dividends.
3 2026 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,963,000,000 ÷ 818,000,000 = 4.84
4 Closing price as at the filing date of Palo Alto Networks Inc. Annual Report.
5 2026 Calculation
P/FCFE = Share price ÷ FCFE per share
= 338.49 ÷ 4.84 = 69.87
6 Click competitor name to see calculations.
The financial trajectory from July 2021 to July 2026 is characterized by a substantial increase in market valuation and fluctuating free cash flow to equity (FCFE) per share, resulting in significant volatility in the P/FCFE ratio.
- Share Price Appreciation
- A consistent and aggressive upward trend is observed in the share price, which climbed from 78.04 US$ in 2021 to 338.49 US$ by 2026. This indicates a strong and sustained expansion in the market's valuation of the equity over the analyzed period.
- FCFE per Share Performance
- Free cash flow to equity per share exhibited an uneven growth pattern. Although the value increased from 2.37 US$ in 2021 to 4.84 US$ in 2026, a notable contraction occurred in 2023, where FCFE per share fell to 1.52 US$ from 2.99 US$ in the prior year. A recovery phase followed, with values increasing steadily from 2024 through 2026.
- P/FCFE Ratio Volatility
- The P/FCFE ratio experienced high variance, moving from a relatively stable range of approximately 30x in 2021 and 2022 to a peak of 79.75 in 2023. This spike was primarily driven by the compression of FCFE per share during a period of rising share prices. While the ratio moderated to the 50x–53x range between 2024 and 2025, it rose again to 69.87 by 2026, suggesting that the market maintained a high premium on the company's cash flow generation capabilities.
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