Intrinsic value of Palo Alto Networks - PANW

Previous Close

$149.01

  Intrinsic Value

$7.71

stock screener

  Rating & Target

str. sell

-95%

  Value-price divergence*

-74%

Previous close

$149.01

 
Intrinsic value

$7.71

 
Up/down potential

-95%

 
Rating

str. sell

 
Value-price divergence*

-74%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of PANW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 13.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  48.60
  24.90
  22.91
  21.12
  19.51
  18.06
  16.75
  15.58
  14.52
  13.57
  12.71
  11.94
  11.24
  10.62
  10.06
  9.55
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
Revenue, $m
  1,379
  1,722
  2,117
  2,564
  3,064
  3,618
  4,223
  4,881
  5,590
  6,348
  7,155
  8,009
  8,910
  9,856
  10,848
  11,884
  12,965
  14,091
  15,264
  16,483
  17,750
  19,067
  20,435
  21,858
  23,336
  24,873
  26,472
  28,136
  29,869
  31,673
  33,554
Variable operating expenses, $m
 
  1,932
  2,371
  2,868
  3,424
  4,039
  4,713
  5,445
  6,233
  7,076
  7,974
  8,907
  9,909
  10,961
  12,064
  13,216
  14,419
  15,671
  16,975
  18,331
  19,740
  21,204
  22,726
  24,308
  25,952
  27,662
  29,440
  31,290
  33,217
  35,224
  37,315
Fixed operating expenses, $m
 
  19
  20
  20
  21
  21
  22
  23
  23
  24
  24
  25
  26
  26
  27
  28
  28
  29
  30
  30
  31
  32
  33
  34
  34
  35
  36
  37
  38
  39
  40
Total operating expenses, $m
  1,569
  1,951
  2,391
  2,888
  3,445
  4,060
  4,735
  5,468
  6,256
  7,100
  7,998
  8,932
  9,935
  10,987
  12,091
  13,244
  14,447
  15,700
  17,005
  18,361
  19,771
  21,236
  22,759
  24,342
  25,986
  27,697
  29,476
  31,327
  33,255
  35,263
  37,355
Operating income, $m
  -190
  -229
  -274
  -324
  -381
  -443
  -512
  -586
  -666
  -752
  -843
  -923
  -1,024
  -1,131
  -1,243
  -1,360
  -1,482
  -1,609
  -1,741
  -1,878
  -2,021
  -2,169
  -2,324
  -2,484
  -2,651
  -2,824
  -3,004
  -3,191
  -3,386
  -3,590
  -3,801
EBITDA, $m
  -147
  -195
  -236
  -282
  -333
  -390
  -453
  -520
  -593
  -671
  -754
  -841
  -934
  -1,031
  -1,133
  -1,239
  -1,350
  -1,465
  -1,585
  -1,710
  -1,840
  -1,975
  -2,116
  -2,262
  -2,413
  -2,571
  -2,734
  -2,905
  -3,082
  -3,267
  -3,460
Interest expense (income), $m
  0
  18
  11
  25
  41
  59
  79
  100
  124
  150
  177
  206
  236
  269
  303
  338
  376
  414
  455
  497
  541
  586
  634
  683
  734
  787
  842
  900
  959
  1,022
  1,086
Earnings before tax, $m
  -205
  -246
  -284
  -349
  -422
  -502
  -591
  -687
  -790
  -901
  -1,020
  -1,129
  -1,261
  -1,400
  -1,546
  -1,698
  -1,857
  -2,023
  -2,196
  -2,375
  -2,562
  -2,756
  -2,957
  -3,167
  -3,384
  -3,611
  -3,846
  -4,091
  -4,346
  -4,611
  -4,888
Tax expense, $m
  21
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -226
  -246
  -284
  -349
  -422
  -502
  -591
  -687
  -790
  -901
  -1,020
  -1,129
  -1,261
  -1,400
  -1,546
  -1,698
  -1,857
  -2,023
  -2,196
  -2,375
  -2,562
  -2,756
  -2,957
  -3,167
  -3,384
  -3,611
  -3,846
  -4,091
  -4,346
  -4,611
  -4,888

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,286
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,858
  1,964
  2,414
  2,924
  3,494
  4,125
  4,816
  5,566
  6,374
  7,239
  8,159
  9,133
  10,160
  11,239
  12,369
  13,551
  14,783
  16,068
  17,404
  18,794
  20,239
  21,741
  23,301
  24,923
  26,609
  28,362
  30,185
  32,082
  34,058
  36,115
  38,260
Adjusted assets (=assets-cash), $m
  1,572
  1,964
  2,414
  2,924
  3,494
  4,125
  4,816
  5,566
  6,374
  7,239
  8,159
  9,133
  10,160
  11,239
  12,369
  13,551
  14,783
  16,068
  17,404
  18,794
  20,239
  21,741
  23,301
  24,923
  26,609
  28,362
  30,185
  32,082
  34,058
  36,115
  38,260
Revenue / Adjusted assets
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
  0.877
Average production assets, $m
  80
  100
  123
  149
  178
  210
  245
  283
  324
  368
  415
  465
  517
  572
  629
  689
  752
  817
  885
  956
  1,029
  1,106
  1,185
  1,268
  1,353
  1,443
  1,535
  1,632
  1,732
  1,837
  1,946
Working capital, $m
  927
  -448
  -550
  -667
  -797
  -941
  -1,098
  -1,269
  -1,453
  -1,651
  -1,860
  -2,082
  -2,317
  -2,563
  -2,820
  -3,090
  -3,371
  -3,664
  -3,969
  -4,286
  -4,615
  -4,957
  -5,313
  -5,683
  -6,067
  -6,467
  -6,883
  -7,315
  -7,766
  -8,235
  -8,724
Total debt, $m
  500
  305
  709
  1,168
  1,682
  2,249
  2,871
  3,546
  4,274
  5,052
  5,880
  6,756
  7,681
  8,652
  9,669
  10,733
  11,842
  12,998
  14,201
  15,452
  16,752
  18,104
  19,508
  20,968
  22,485
  24,063
  25,703
  27,411
  29,189
  31,041
  32,971
Total liabilities, $m
  1,963
  1,768
  2,172
  2,631
  3,145
  3,712
  4,334
  5,009
  5,737
  6,515
  7,343
  8,219
  9,144
  10,115
  11,132
  12,196
  13,305
  14,461
  15,664
  16,915
  18,215
  19,567
  20,971
  22,431
  23,948
  25,526
  27,166
  28,874
  30,652
  32,504
  34,434
Total equity, $m
  895
  196
  241
  292
  349
  412
  482
  557
  637
  724
  816
  913
  1,016
  1,124
  1,237
  1,355
  1,478
  1,607
  1,740
  1,879
  2,024
  2,174
  2,330
  2,492
  2,661
  2,836
  3,018
  3,208
  3,406
  3,612
  3,826
Total liabilities and equity, $m
  2,858
  1,964
  2,413
  2,923
  3,494
  4,124
  4,816
  5,566
  6,374
  7,239
  8,159
  9,132
  10,160
  11,239
  12,369
  13,551
  14,783
  16,068
  17,404
  18,794
  20,239
  21,741
  23,301
  24,923
  26,609
  28,362
  30,184
  32,082
  34,058
  36,116
  38,260
Debt-to-equity ratio
  0.559
  1.550
  2.940
  4.000
  4.810
  5.450
  5.960
  6.370
  6.700
  6.980
  7.210
  7.400
  7.560
  7.700
  7.820
  7.920
  8.010
  8.090
  8.160
  8.220
  8.280
  8.330
  8.370
  8.410
  8.450
  8.480
  8.520
  8.540
  8.570
  8.590
  8.620
Adjusted equity ratio
  -0.249
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -226
  -246
  -284
  -349
  -422
  -502
  -591
  -687
  -790
  -901
  -1,020
  -1,129
  -1,261
  -1,400
  -1,546
  -1,698
  -1,857
  -2,023
  -2,196
  -2,375
  -2,562
  -2,756
  -2,957
  -3,167
  -3,384
  -3,611
  -3,846
  -4,091
  -4,346
  -4,611
  -4,888
Depreciation, amort., depletion, $m
  43
  34
  38
  42
  48
  53
  59
  66
  73
  81
  89
  81
  91
  100
  110
  121
  132
  143
  155
  168
  181
  194
  208
  222
  237
  253
  269
  286
  304
  322
  341
Funds from operations, $m
  1,081
  -213
  -246
  -307
  -374
  -449
  -531
  -621
  -717
  -820
  -930
  -1,047
  -1,170
  -1,300
  -1,435
  -1,577
  -1,725
  -1,880
  -2,040
  -2,208
  -2,381
  -2,562
  -2,749
  -2,944
  -3,147
  -3,358
  -3,577
  -3,805
  -4,042
  -4,289
  -4,546
Change in working capital, $m
  423
  -89
  -103
  -116
  -130
  -144
  -158
  -171
  -184
  -197
  -210
  -222
  -234
  -246
  -258
  -269
  -281
  -293
  -305
  -317
  -329
  -342
  -356
  -370
  -384
  -400
  -416
  -433
  -450
  -469
  -489
Cash from operations, $m
  658
  -123
  -144
  -190
  -244
  -305
  -374
  -450
  -533
  -623
  -721
  -825
  -936
  -1,054
  -1,178
  -1,308
  -1,444
  -1,587
  -1,736
  -1,891
  -2,052
  -2,219
  -2,394
  -2,575
  -2,763
  -2,958
  -3,161
  -3,372
  -3,591
  -3,820
  -4,058
Maintenance CAPEX, $m
  0
  -14
  -18
  -22
  -26
  -31
  -37
  -43
  -50
  -57
  -65
  -73
  -81
  -91
  -100
  -110
  -121
  -132
  -143
  -155
  -168
  -181
  -194
  -208
  -222
  -237
  -253
  -269
  -286
  -304
  -322
New CAPEX, $m
  -73
  -20
  -23
  -26
  -29
  -32
  -35
  -38
  -41
  -44
  -47
  -50
  -52
  -55
  -58
  -60
  -63
  -65
  -68
  -71
  -73
  -76
  -79
  -82
  -86
  -89
  -93
  -97
  -100
  -105
  -109
Cash from investing activities, $m
  -339
  -34
  -41
  -48
  -55
  -63
  -72
  -81
  -91
  -101
  -112
  -123
  -133
  -146
  -158
  -170
  -184
  -197
  -211
  -226
  -241
  -257
  -273
  -290
  -308
  -326
  -346
  -366
  -386
  -409
  -431
Free cash flow, $m
  319
  -157
  -184
  -238
  -299
  -369
  -446
  -531
  -624
  -724
  -832
  -947
  -1,070
  -1,199
  -1,335
  -1,478
  -1,628
  -1,784
  -1,947
  -2,117
  -2,293
  -2,476
  -2,667
  -2,865
  -3,071
  -3,285
  -3,507
  -3,738
  -3,978
  -4,228
  -4,489
Issuance/(repayment) of debt, $m
  0
  -195
  405
  459
  513
  568
  622
  675
  727
  778
  828
  877
  924
  971
  1,017
  1,063
  1,109
  1,156
  1,203
  1,251
  1,300
  1,351
  1,404
  1,460
  1,517
  1,578
  1,641
  1,708
  1,778
  1,852
  1,930
Issuance/(repurchase) of shares, $m
  45
  834
  329
  400
  479
  565
  660
  762
  871
  988
  1,112
  1,226
  1,364
  1,508
  1,659
  1,816
  1,981
  2,152
  2,329
  2,514
  2,706
  2,906
  3,113
  3,329
  3,553
  3,786
  4,028
  4,281
  4,543
  4,817
  5,102
Cash from financing (excl. dividends), $m  
  39
  639
  734
  859
  992
  1,133
  1,282
  1,437
  1,598
  1,766
  1,940
  2,103
  2,288
  2,479
  2,676
  2,879
  3,090
  3,308
  3,532
  3,765
  4,006
  4,257
  4,517
  4,789
  5,070
  5,364
  5,669
  5,989
  6,321
  6,669
  7,032
Total cash flow (excl. dividends), $m
  359
  481
  550
  621
  693
  765
  836
  906
  975
  1,042
  1,108
  1,155
  1,218
  1,280
  1,341
  1,401
  1,462
  1,523
  1,585
  1,649
  1,714
  1,781
  1,851
  1,923
  1,999
  2,079
  2,163
  2,250
  2,343
  2,440
  2,543
Retained Cash Flow (-), $m
  -407
  -834
  -329
  -400
  -479
  -565
  -660
  -762
  -871
  -988
  -1,112
  -1,226
  -1,364
  -1,508
  -1,659
  -1,816
  -1,981
  -2,152
  -2,329
  -2,514
  -2,706
  -2,906
  -3,113
  -3,329
  -3,553
  -3,786
  -4,028
  -4,281
  -4,543
  -4,817
  -5,102
Prev. year cash balance distribution, $m
 
  1,286
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  933
  221
  221
  214
  199
  176
  144
  104
  54
  -4
  -71
  -146
  -228
  -318
  -415
  -518
  -628
  -744
  -866
  -993
  -1,125
  -1,263
  -1,405
  -1,554
  -1,707
  -1,866
  -2,030
  -2,200
  -2,377
  -2,559
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  895
  202
  192
  176
  154
  128
  98
  65
  31
  -2
  -34
  -62
  -87
  -107
  -122
  -132
  -137
  -137
  -133
  -126
  -116
  -105
  -92
  -79
  -66
  -54
  -44
  -34
  -26
  -19
Current shareholders' claim on cash, %
  100
  50.0
  42.8
  36.7
  31.6
  27.2
  23.4
  20.2
  17.5
  15.1
  13.1
  11.4
  9.9
  8.6
  7.5
  6.6
  5.7
  5.0
  4.4
  3.8
  3.3
  2.9
  2.6
  2.2
  2.0
  1.7
  1.5
  1.3
  1.1
  1.0
  0.9

Palo Alto Networks, Inc. offers a next-generation security platform. The Company's security platform consists of three elements: Next-Generation Firewall, Advanced Endpoint Protection and Threat Intelligence Cloud. Its Next-Generation Firewall delivers application, user and content visibility and control, as well as protection against network-based cyber threats integrated within the firewall through its hardware and software architecture. Its Advanced Endpoint Protection prevents cyber attacks that run malicious code or exploit software vulnerabilities on a range of fixed and virtual endpoints and servers. Its Threat Intelligence Cloud provides central intelligence capabilities, security for software as a service applications and automated delivery of preventative measures against cyber attacks. Its products and services include firewall appliances, panorama, virtual system upgrades, subscription services, support and maintenance, and professional services.

FINANCIAL RATIOS  of  Palo Alto Networks (PANW)

Valuation Ratios
P/E Ratio -59.7
Price to Sales 9.8
Price to Book 15.1
Price to Tangible Book
Price to Cash Flow 20.5
Price to Free Cash Flow 23.1
Growth Rates
Sales Growth Rate 48.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 114.7%
Cap. Spend. - 3 Yr. Gr. Rate 27.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 55.9%
Total Debt to Equity 55.9%
Interest Coverage 0
Management Effectiveness
Return On Assets -9.4%
Ret/ On Assets - 3 Yr. Avg. -13.6%
Return On Total Capital -19.1%
Ret/ On T. Cap. - 3 Yr. Avg. -24.6%
Return On Equity -32.7%
Return On Equity - 3 Yr. Avg. -42.7%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 73.2%
Gross Margin - 3 Yr. Avg. 73.2%
EBITDA Margin -11.7%
EBITDA Margin - 3 Yr. Avg. -19.8%
Operating Margin -13.8%
Oper. Margin - 3 Yr. Avg. -21.4%
Pre-Tax Margin -14.9%
Pre-Tax Margin - 3 Yr. Avg. -22.9%
Net Profit Margin -16.4%
Net Profit Margin - 3 Yr. Avg. -24%
Effective Tax Rate -10.2%
Eff/ Tax Rate - 3 Yr. Avg. -5.9%
Payout Ratio 0%

PANW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PANW stock intrinsic value calculation we used $1379 million for the last fiscal year's total revenue generated by Palo Alto Networks. The default revenue input number comes from 2016 income statement of Palo Alto Networks. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PANW stock valuation model: a) initial revenue growth rate of 24.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for PANW is calculated based on our internal credit rating of Palo Alto Networks, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Palo Alto Networks.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PANW stock the variable cost ratio is equal to 112.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $19 million in the base year in the intrinsic value calculation for PANW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Palo Alto Networks.

Corporate tax rate of 27% is the nominal tax rate for Palo Alto Networks. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PANW stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PANW are equal to 5.8%.

Life of production assets of 5.7 years is the average useful life of capital assets used in Palo Alto Networks operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PANW is equal to -26%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $895 million for Palo Alto Networks - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 89.637 million for Palo Alto Networks is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Palo Alto Networks at the current share price and the inputted number of shares is $13.4 billion.

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COMPANY NEWS

▶ Palo Alto Pops But Symantec, Qualys Fall On Analyst's Note   [Oct-10-17 04:55PM  Investor's Business Daily]
▶ Inside FireEyes Value Proposition in the Cybersecurity Space   [Oct-09-17 10:36AM  Market Realist]
▶ Cyber Security stocks on the rise: 3 trades   [Oct-04-17 05:00PM  CNBC Videos]
▶ Could Palo Alto Join Symantec In Big Cybersecurity Acquisitions?   [Sep-28-17 04:46PM  Investor's Business Daily]
▶ Palo Alto Networks: Cramer's Top Takeaways   [06:28AM  TheStreet.com]
▶ Palo Alto Networks CEO on the epic Equifax breach   [Sep-27-17 07:08PM  CNBC Videos]
▶ 13 Ways to Invest in Cybersecurity   [09:25AM  Investopedia]
▶ Forget the Bears Buy FireEye (FEYE) Stock!   [06:06AM  InvestorPlace]
▶ 2 Stocks I'd Never Buy, and 1 I'll Consider   [Sep-18-17 08:02AM  Motley Fool]
▶ 2 Ways Okta Inc Is Powering Future Growth   [Sep-15-17 08:02AM  Motley Fool]
▶ 3 Reasons to Bet on Palo Alto Networks   [Sep-14-17 08:17PM  Motley Fool]
▶ Stocks With Rising Relative Strength: Symantec   [Sep-08-17 03:00AM  Investor's Business Daily]
▶ Nice Trying To Close In On Key Technical Measure   [03:00AM  Investor's Business Daily]
▶ Top Analysts Clash On Palo Alto Networks Inc.   [Sep-06-17 01:30PM  Forbes]
▶ Company News For Sep 05, 2017   [10:25AM  Zacks]
▶ Composite Rating For Palo Alto Networks Jumps To 96   [03:00AM  Investor's Business Daily]
▶ What Happened in the Stock Market Today   [Sep-01-17 05:07PM  Motley Fool]
▶ Stocks Higher As Top-10 Group Continues To Add Breakouts   [01:31PM  Investor's Business Daily]
▶ JPM analyst: Buy this security stock   [01:15PM  CNBC Videos]
▶ Tech Earnings Recap   [09:58AM  Zacks]
▶ How Palo Alto Crushed Q4 Earnings   [08:40AM  24/7 Wall St.]
▶ Palo Alto reports 4Q loss   [Aug-31-17 09:40PM  Associated Press]
▶ Palo Alto beats on top line   [04:14PM  CNBC Videos]
▶ Earnings Preview: Palo Alto Networks   [05:14AM  Investor's Business Daily]
▶ Tech Earnings For August 31   [Aug-30-17 04:11PM  Zacks]
▶ Lululemon, Palo Alto Networks Lead Thursday Earnings   [10:46AM  Investor's Business Daily]
▶ Palo Alto Networks Expected To Maintain Double-Digit Growth   [Aug-29-17 04:07PM  Investor's Business Daily]
Financial statements of PANW
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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