Is Palo Alto Networks, Inc. (PANW) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $330.89, Palo Alto Networks, Inc. (PANW) sits above every lens we ran: our valuation lenses put the business somewhere between $40.79 and $171.61 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Palo Alto Networks, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 9.8%, with a long-run terminal growth rate of 2.5%. About 79% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — PANW would need sustained revenue growth of more than 25%/yr to justify today's price, against about 15.2% a year compounded in our base case. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, PANW's modeled DCF value ranges from about $37.74 to $70.64 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Palo Alto Networks, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of PANW's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind PANW's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $11,480,000,000 | Palo Alto Networks FY2026 10-K (fiscal year ended 2026-07-31; accession 0001327567-26-000023, filed 2026-09-10): Total revenue FY2026 (year ended 31 July 2026), us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax: product $2,280M + subscription and support $9,200M = $11,480M, +24.5% on FY2025's $9,221M. HEAVILY ACQUISITION-SHAPED: Chronosphere closed 2026-01-29 and CyberArk closed 2026-02-11, and the 10-K says the two together contributed $930M of revenue (and an operating LOSS of $797M) after their close dates. Ex those two, growth was ~14.4% ((11,480-930)/9,221 - my arithmetic, not a company figure). The 10-K's unaudited pro forma, as if both had been owned all along, is $12,312M for FY2026 vs $10,486M for FY2025 (+17.4%). The base is the REPORTED figure, which carries only ~5.5 months of CyberArk; the full-year effect therefore sits in Year-1 growth, which is ~7 points inorganic. CROSS-CHECK, latest quarter (Q4 FY2026, the first quarter with both deals in for the whole period): revenue $3,410M, +34% YoY. All share data on this page is post the 2-for-1 stock split effected 2024-12-12 (10-K Note 1). |
| Base EBIT margin | 6.0% | Palo Alto Networks FY2026 10-K (fiscal year ended 2026-07-31; accession 0001327567-26-000023, filed 2026-09-10): GAAP operating income $695M / revenue $11,480M = 6.05%. GAAP, NOT the 29.2% non-GAAP margin ($3,356M) Palo Alto headlines. The Q4 release reconciles the 23-point gap: share-based-compensation-related charges $1,712M (14.9% of revenue), acquired-intangible amortization $638M (5.6%), acquisition-related costs $295M (2.6%, already NET of a $117M gain on the IBM QRadar contingent-consideration liability) and litigation $16M. All stay in. FY2025 GAAP margin was 13.5% ($1,243M); the halving is the two big deals (operating loss of $797M since close, per the 10-K: amortization, replacement-award SBC, integration). CROSS-CHECK, Q4 FY2026: GAAP 5.0% ($172M / $3,410M), non-GAAP 29.6%, with amortization alone at $281M (8.2% of revenue) - the run-rate once CyberArk is in for a full quarter. EXCLUDED below this line: other income of -$159M, which nets interest income against a $562M loss on the fair value of CyberArk's convertible notes and capped calls (a mark on the share price, not an operating cost). |
| Forecast revenue growth | 23% → 15% → 14% → 13% → 11% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. |
| Beta | 0.91 | Yahoo Finance / yfinance published beta (5Y monthly): Published 5Y-monthly beta 0.908, used as published (house rule). Flag: 2026 has been extraordinarily volatile for this stock - $139.57 to $409.50 inside 52 weeks, a 9% one-day fall on 2026-09-02 and a 13% one-day rise on 2026-09-14 - and a 60-month regression barely registers it. If anything the published figure is low, so using it is mildly GENEROUS; a beta of 1.2 would take ~$8/share off. Each 0.1 of beta is worth roughly $2.5-3/share. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. Palo Alto's last forecast year grows 11%, so the step down to 2.5% is a steep fade and the single biggest structural reason a five-year DCF struggles with this company; 3.0% adds ~$2.6/share, 2.0% takes ~$2.3 off. Must remain < WACC (9.76%). |
| Diluted shares | 833M | Palo Alto Networks Q4 FY2026 earnings release, 8-K Ex-99.1 (accession 0001327567-26-000019, filed 2026-09-01) (GAAP-to-non-GAAP share reconciliation) + FY2026 10-K: 833M = Q4 FY2026 weighted-average basic/GAAP-diluted shares of 817M + 16M of dilutive employee awards that GAAP excluded only because Q4 was a loss quarter (release reconciliation, footnote 5: 'potentially dilutive effect of employee equity incentive plan awards in periods with GAAP net loss'). The -1M capped-call adjustment Palo Alto uses for non-GAAP is NOT taken, because the capped calls are credited in net debt instead. The full-year diluted figure (764M) is not used: CyberArk's 112M shares were only issued on 2026-02-11. The count is RISING, not falling: 668M outstanding a year ago, 815M at 2026-07-31, 818M at 2026-08-31 (10-K cover), and management's FY2027 non-GAAP EPS guide uses 844-847M. Using 846M would take ~$0.75/share off. Only $1.0B of buyback authority remains, expiring 2026-12-31. |
| Market price | $330.89 | Delayed quote · as of 2026-11-10 05:55 UTC |
Compare PANW with its peers
Companies people research alongside PANW
Explore more
Most undervalued stocks (per our valuation) · Undervalued Technology stocks · All valued stocks · Interactive PANW valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.