Palo Alto Networks, Inc. PANW
Palo Alto Networks is delivering genuine business acceleration — Q3 FY2026 revenue grew 31% YoY to $3.00B and the company beat its most recent earnings estimate by 4.29% on 2026-09-01 — but the stock has rallied roughly 30% since Q3 results and trades at 304x earnings, 539% above the peer median, leaving no room for disappointment. The Q3 FY2026 quarter swung to a $183M operating loss from $400M of operating income the prior quarter, signaling that platformization investments are pressuring margins even as the top line surges.
With smart money collapsing to a 0.0001 score as of Q2 2026 and insiders net-selling $865M over 24 months, the positioning and valuation setup is unfavorable despite the fundamental momentum.
What could go wrong
- Margin deterioration from platformization. Q3 FY2026 operating income swung to -$183M from +$400M in Q2 FY2026, and FY2025 EPS fell to $1.60 from $3.64 in FY2024 — the platformization strategy is suppressing profitability even as revenue accelerates.
- Extreme valuation. At 304x PE (539% above peer median), 27.8x PS (168% above peer median), and 129x EV/EBITDA (374% above peer median), the stock prices in sustained high growth and margin recovery with no margin for error.
- Smart money exodus. Smart money score collapsed to 0.0001 as of Q2 2026 from 0.0861 in Q1 2026, with fund count dropping from 66 to 62 — institutional conviction has essentially evaporated at these levels.
- Insider selling pressure. Insiders net-sold $865M over 24 months with 243 dispositions versus 38 acquisitions; recent months show only sales by the Chief Accounting Officer and other insiders.
What would change my mind
Where this comes from: quarterly_results (Q3 FY2026, period_end 2026-04-30) · quarterly_results (Q3 and Q2 FY2026) · earnings_surprises (period_end 2026-09-01) · peer_relative. Orin's read on PANW; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All PANW filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $18.1B | 0.4% of fund |
| State Street | $12.6B | 0.4% of fund |
| Morgan Stanley | $10.0B | 0.5% of fund |
| Invesco | $8.7B | 0.7% of fund |
| Bank Of America /De/ | $7.7B | 0.5% of fund |
| Jpmorgan Chase & | $7.2B | 0.4% of fund |
153 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 298 Form 4 filings, net −$874.8M. Of the 50 on hand, 0 were open-market purchases and 42 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/S | 27.92× | 11.00× | — |
| P/B | 10.7× | 43.3× | — |
Its P/E sits above all 5 of the last 5 years (+6.59σ from its own mean).
28.8%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $3.5B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$397
$290 – $475 · +1% against today's price
- 64 buy or overweight
- 23 hold
- 2 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| PANWPalo Alto Networks, Inc. | $321B | — | — | 70.4% | 2.7% | 2% |
| ACNAccenture plc | $112B | 14.5× | 8.7× | 32.0% | 10.7% | 25% |
| ADBEAdobe Inc. | $96B | 13.4× | 9.6× | 89.1% | 28.0% | 63% |
| APHAmphenol Corporation | $203B | 39.1× | 23.1× | 38.5% | 17.8% | 37% |
| CRWDCrowdStrike Holdings, Inc. | $267B | — | — | 75.2% | 1.1% | 1% |
| FTNTFortinet, Inc. | $131B | 62.5× | 44.5× | 80.4% | 28.2% | 188% |
| KLACKLA Corporation | $245B | 51.0× | 43.4× | 61.3% | 35.6% | 85% |
| NOWServiceNow, Inc. | $146B | 87.4× | 43.4× | 74.8% | 11.3% | 14% |
| SNPSSynopsys, Inc. | $79B | 71.7× | 24.4× | 72.4% | 11.4% | 4% |
| TXNTexas Instruments Incorporated | $249B | 41.2× | 28.5× | 58.3% | 31.1% | 36% |
The median is of the 8 peers listed above and nothing else — check it against the column. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $117 | $264.55 · −56% | 2026-06-10 |
| Levered DCF | $151 | $264.55 · −43% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.