Palo Alto NetworksFRA:5AP +3.57%76 Gross Margin % is 67.55% as of Apr. 2026, which is 6% below its 10-year median of 72.21. GuruFocus rates FRA:5AP with a GF Score™ of 76/100 and a GF Value™ of €187.17 (Significantly Overvalued). The stock has 7 warning signs investors should review. Among 2,685 Software companies, Palo Alto Networks ranks better than 81.64% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Palo Alto Networks had a gross margin of 67.55% for the quarter that ended in Apr. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Palo Alto Networks Gross Margin % Related Terms
Palo Alto Networks Gross Margin % Historical Data
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The historical data trend for Palo Alto Networks's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:5AP vs CRWD, FTNT, SNPS: Gross Margin % Comparison
For the Software - Infrastructure subindustry, Palo Alto Networks's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Palo Alto Networks Gross Margin % vs Software Industry
For the Software industry and Technology sector, Palo Alto Networks's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Palo Alto Networks's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Palo Alto Networks (FRA:5AP) has a Gross Margin % of 67.55% as of Apr. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Palo Alto Networks and its competitors. This is near median its historical median of 72.21. Over the past decade, Palo Alto Networks' Gross Margin % has ranged from 68.76 to 74.35. According to the industry distribution chart, Palo Alto Networks ranks #493 out of 2685 companies in the Software industry, placing it in the top 18.4%.
Is Palo Alto Networks' Gross Margin % too high?
Palo Alto Networks' current Gross Margin % of 67.55% is near median its 10-year median of 72.21. Over the past 10 years, this metric has ranged from a low of 68.76 to a high of 74.35. The Software industry median Gross Margin % is 40.45. Palo Alto Networks' value of 67.55% is 67% above this industry median. Based on the distribution chart, Palo Alto Networks ranks #493 out of 2685 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Palo Alto Networks has a GF Score™ of 76/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Palo Alto Networks' Gross Margin % compare to CRWD and FTNT?
According to the Software industry distribution chart, Palo Alto Networks ranks #493 out of 2685 companies for Gross Margin %. This places Palo Alto Networks in the top 18% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 40.45. Palo Alto Networks' value of 67.55% is 67% above this benchmark. Historically, Palo Alto Networks' own Gross Margin % has ranged from 68.76 to 74.35 over the past decade. While the company's 10-year median is 72.21 vs. the industry median of 40.45, Palo Alto Networks has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,685 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Palo Alto Networks's current Gross Margin % of 67.55% is 67% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Palo Alto Networks and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Palo Alto Networks's current Gross Margin % is 67.55%, which is near median its own 10-year median of 72.21. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Palo Alto Networks stock overvalued right now?
Based on GuruFocus' analysis, Palo Alto Networks (FRA:5AP) is currently considered Significantly Overvalued. The stock's GF Value™ is €187.17, compared to a current price of €268.20 — trading 43.3% above its estimated fair value. The current Gross Margin % is 67.55%, which is near median its 10-year median of 72.21 and 67% above the Software industry median of 40.45. Palo Alto Networks' overall GF Score™ is 76/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Palo Alto Networks (FRA:5AP), the current Gross Margin % is 67.55% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Palo Alto Networks (FRA:5AP) Overvalued in 2026?
Based on GuruFocus' analysis, Palo Alto Networks stock appears to be overvalued.
The current stock price of €268.20 is trading 43.3% above its estimated GF Value™ of €187.17.
GuruFocus considers Palo Alto Networks to be Significantly Overvalued.
Key valuation signals for FRA:5AP:
Gross Margin %: 67.55% (near median its 10-year median of 72.21)
GF Value™: €187.17 vs. price of €268.20 (43.3% above fair value)
Industry Position: 67% above the Software median (#493 of 2685)
No single metric tells the full story. See the FRA:5AP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Palo Alto Networks is a platform-based cybersecurity vendor with product offerings covering network security, cloud security, and security operations. The California-based firm has more than 80,000 enterprise customers across the world, including more than three-fourths of the Global 2000.
76GF Score
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