Comparing Palo Alto Networks (PANW) and The Competition

Palo Alto Networks (NASDAQ:PANW) is one of 953 publicly-traded companies in the “Software” industry, but how does it compare to its peers? We will compare Palo Alto Networks to similar companies based on the strength of its institutional ownership, profitability, dividends, analyst recommendations, valuation, earnings and risk.

Volatility & Risk

Palo Alto Networks has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Palo Alto Networks’ peers have a beta of 1.34, meaning that their average stock price is 34% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Palo Alto Networks and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palo Alto Networks	0	11	39	0	2.78
Palo Alto Networks Competitors	5761	21571	44959	1498	2.57

Palo Alto Networks presently has a consensus price target of $398.55, suggesting a potential upside of 22.12%. As a group, “Software” companies have a potential upside of 29.60%. Given Palo Alto Networks’ peers higher probable upside, analysts plainly believe Palo Alto Networks has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares Palo Alto Networks and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Palo Alto Networks	$11.48 billion	$307.00 million	639.92
Palo Alto Networks Competitors	$1.80 billion	$386.86 million	108.98

Palo Alto Networks has higher revenue, but lower earnings than its peers. Palo Alto Networks is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Palo Alto Networks and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palo Alto Networks	2.67%	8.50%	4.35%
Palo Alto Networks Competitors	-607.19%	26.73%	-8.88%

Insider & Institutional Ownership

79.8% of Palo Alto Networks shares are held by institutional investors. Comparatively, 41.9% of shares of all “Software” companies are held by institutional investors. 0.6% of Palo Alto Networks shares are held by insiders. Comparatively, 19.9% of shares of all “Software” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Palo Alto Networks beats its peers on 7 of the 13 factors compared.

Palo Alto Networks Company Profile

Palo Alto Networks, Inc. is a cybersecurity company that provides products and services to help organizations protect their networks, cloud environments, devices and applications. Its offerings include next-generation firewalls, cloud security tools, secure access services and platforms for detecting and responding to cyber threats. The company’s product portfolio includes Prisma for cloud and network security and Cortex for security operations, including threat detection and response. It also provides cybersecurity consulting and incident-response services through Unit 42.