Palo Alto Networks, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Palo Alto Networks remains a sell at $342 (as of 16 Oct) because the stock still trades at 743x earnings and 24.4x sales against peer medians of 45.5x and 11.6x, even after a 15% decline from the prior sell call at $403.
FY2026 (ended 31 Jul) revenue grew 24.5% to $11.48B, but operating margin compressed to 6.1% from 13.5% in FY2025 and Q4 FY2026 swung to a $282M net loss (EPS -$0.35), signaling that platformization investments are eroding profitability faster than top-line growth can offset. Heavy insider distribution continues — the CEO executed a 500K-share variable prepaid forward on 12 Oct and insiders net-sold $774.6M over 24 months — while a reported firewall vulnerability and AI-financing jitters drove a 7% single-day decline on 16 Oct.
What could go wrong
- Revenue acceleration continues. Q4 FY2026 revenue grew 34.4% YoY to $3.41B, and if this acceleration persists it could justify a premium multiple despite margin compression.
- FCF resilience. FY2026 free cash flow of $4.11B at a 35.8% FCF margin remains best-in-class; if FCF holds while margins compress, the cash-generation story could support the stock.
- Oversold technical bounce. RSI at 37 and the stock trading below its 50-day MA of $373 but well above the 200-day MA of $261 could attract dip-buyers and trigger a short-term reversal.
- Platformization payoff. If operating margins re-expand in FY2027 as platformization investments mature, the current margin trough could prove temporary.
What would change my mind
Where this comes from: peer comparison · FY26 fundamentals · FY25 and FY26 fundamentals · Q4 FY26 results. Orin's read on PANW; not advice.
How has the share price moved?
Up 82.4% over twelve months, from $220.29 on 27 Oct 2025 to $401.70 at the Tue 27 Oct 2026 close. Its highest close in that time was $419.91 on 6 Oct 2026; the last close is 4.3% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 43.7M, on 11 Feb 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All PANW filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $25.8B | 0.4% |
| Vanguard Capital Management | $18.1B | 0.4% |
| State Street | $12.6B | 0.4% |
| Morgan Stanley | $10.0B | 0.5% |
| Invesco | $8.7B | 0.7% |
| Bank of America | $7.7B | 0.5% |
| JPMorgan Chase | $7.2B | 0.4% |
| FMR | $6.8B | 0.3% |
| Geode Capital Management | $6.7B | 0.4% |
| Vanguard Portfolio Management | $6.6B | 0.3% |
155 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 314 Form 4 filings; open-market trades net −$774.6M. Of the 50 on hand, 0 were open-market purchases and 40 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about PANW
Orin answers questions about PANW from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Its profit over the last 12 months is so small against its price that its P/E says little (Tue 27 Oct close). It is priced at 28.6× its yearly sales — above its usual level (12.5×).
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | n/m | — | 46.1× |
| P/S | 28.6×above usual | 12.5× | — |
| EV/EBITDA | 213× | — | — |
| P/B | 10.9× | — | — |
- P/E: no usual level — it ran from 40.2× to 721× over its last 5 fiscal years, so a middle value says little.
- P/E: not meaningful (n/m) — its profit over the last 12 months is so small against its price that the ratio says little.
- EV/EBITDA: no usual level — it ran from 58.3× to 542× over its last 5 fiscal years, so a middle value says little.
- P/B: no usual level — it ran from 9.0× to 238× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $400 (from $290 to $525) — 0% below the Tue 27 Oct close price. That is their published opinion, not Orin's.
$400
$290 – $525 · −0% against the last close
- 35 buy or overweight
- 9 hold
- 1 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Its own P/E is not meaningful (n/m) — its profit over the last 12 months is so small against its price that the ratio says little; the middle P/E of the 3 companies it is compared to that have a P/E that says something is 33.1×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| PANWPalo Alto Networks, Inc. | $329B | n/m | 213× | 70.4% | 2.7% | 2% |
| AKAMAkamai Technologies, Inc. | $11B | 29.0× | 19.3× | 55.4% | 8.8% | 8% |
| CRWDCrowdStrike Holdings, Inc. | $274B | n/m | n/m | 75.2% | 1.1% | 1% |
| CSCOCisco Systems, Inc. | $439B | 33.1× | 23.1× | 64.5% | 21.0% | 27% |
| FTNTFortinet, Inc. | $136B | 64.7× | 47.6× | 80.4% | 28.2% | 188% |
- PANW, CRWD: P/E is not meaningful (n/m) — its profit over the last 12 months is so small against its price that the ratio says little.
- CRWD: EV/EBITDA is not meaningful (n/m) — its operating profit before depreciation over the last 12 months is so small against its price that the ratio says little.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Its P/E now is not shown, and it has no fiscal year with a P/E to draw since its history starts.
- Nownot shown
- Now: not shown. Its profit over the last 12 months is so small against its price that the ratio says little.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $83 a share — 79% below the $402.76 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $83 | 79% below $402.76 |
| Levered | $263 | 35% below $402.76 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.