Stock Analysis on Net
Stock Analysis on Net

Palo Alto Networks Inc. (NASDAQ:PANW)

Price to FCFE (P/FCFE)

Microsoft Excel

Free Cash Flow to Equity (FCFE)

Palo Alto Networks Inc., FCFE calculation

US$ in thousands

Microsoft Excel
12 months ended: Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
Net income (loss) 439,700 (267,000) (498,900) (267,000) (81,900) (147,900)
Net noncash charges 1,774,500 1,730,900 1,653,300 1,230,900 910,000 663,500
Changes in operating assets and liabilities, net of effects of acquisitions 563,300 520,800 348,600 71,800 227,500 521,400
Net cash provided by operating activities 2,777,500 1,984,700 1,503,000 1,035,700 1,055,600 1,037,000
Purchases of property, equipment, and other assets (146,300) (192,800) (116,000) (214,400) (131,200) (112,000)
Repayments of convertible senior notes (1,692,000) (600) (900) — (477,400) —
Payments for debt issuance costs — — (200) — (3,700) —
Proceeds from borrowings on convertible senior notes, net — — — 1,979,100 — 1,682,400
Free cash flow to equity (FCFE) 939,200 1,791,300 1,385,900 2,800,400 443,300 2,607,400

Based on: 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).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Palo Alto Networks Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Palo Alto Networks Inc. FCFE increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Price to FCFE Ratio, Current

Palo Alto Networks Inc., current P/FCFE calculation, comparison to benchmarks

Microsoft Excel
No. shares of common stock outstanding 323,100,000
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands) 939,200
FCFE per share 2.91
Current share price (P) 291.42
Valuation Ratio
P/FCFE 100.25
Benchmarks
P/FCFE, Competitors1
Accenture PLC 21.32
Adobe Inc. 33.21
International Business Machines Corp. 9.05
Intuit Inc. 44.82
Microsoft Corp. 53.24
Oracle Corp. 15.04
Salesforce Inc. 34.61
ServiceNow Inc. 54.85
Synopsys Inc. 54.88
P/FCFE, Sector
Software & Services 37.19
P/FCFE, Industry
Information Technology 41.64

Based on: 10-K (reporting date: 2023-07-31).

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

Microsoft Excel
Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
No. shares of common stock outstanding1 308,594,604 299,213,808 292,218,339 289,119,882 290,971,440 281,468,955
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)2 939,200 1,791,300 1,385,900 2,800,400 443,300 2,607,400
FCFE per share3 3.04 5.99 4.74 9.69 1.52 9.26
Share price1, 4 242.72 176.85 156.07 78.55 70.39 78.70
Valuation Ratio
P/FCFE5 79.75 29.54 32.91 8.11 46.20 8.50
Benchmarks
P/FCFE, Competitors6
Accenture PLC 21.03 17.91 25.76 19.01 19.50 18.11
Adobe Inc. 41.83 21.32 34.26 41.36 41.90 19.87
International Business Machines Corp. 9.97 11.97 48.45 9.43 4.39 —
Intuit Inc. 38.74 13.86 86.74 17.36 34.61 29.29
Microsoft Corp. 43.32 36.73 42.54 42.74 30.77 37.57
Oracle Corp. 15.47 — 8.36 6.27 22.31 10.78
Salesforce Inc. 31.06 16.56 49.52 50.40 29.09 —
ServiceNow Inc. 58.13 44.44 64.54 49.83 68.98 —
Synopsys Inc. 57.04 33.41 40.55 45.07 77.64 19.63
P/FCFE, Sector
Software & Services 32.42 30.43 33.49 25.65 21.90 —
P/FCFE, Industry
Information Technology 33.34 26.56 27.30 23.29 18.92 —

Based on: 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).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 939,200,000 ÷ 308,594,604 = 3.04

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

5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 242.72 ÷ 3.04 = 79.75

6 Click competitor name to see calculations.

Valuation ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Palo Alto Networks Inc. P/FCFE ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.