GURUFOCUS.COM » STOCK LIST » USA » NAS » Palo Alto Networks Inc (NAS:PANW) » Definitions » Financial Strength
Switch to:

Palo Alto Networks Financial Strength

: 4 (As of Apr. 2022)
View and export this data going back to 2012. Start your Free Trial

Palo Alto Networks has the Financial Strength Rank of 4.

Warning Sign:

Palo Alto Networks Inc displays poor financial strength. Usually, this is caused by too much debt for the company.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Palo Alto Networks did not have earnings to cover the interest expense. Palo Alto Networks's debt to revenue ratio for the quarter that ended in Apr. 2022 was 0.71. As of today, Palo Alto Networks's Altman Z-Score is 2.89.


Competitive Comparison

For the Software - Infrastructure subindustry, Palo Alto Networks's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength Distribution

For the Software industry and Technology sector, Palo Alto Networks's Financial Strength distribution charts can be found below:

* The bar in red indicates where Palo Alto Networks's Financial Strength falls into.



Palo Alto Networks Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Palo Alto Networks's Interest Expense for the months ended in Apr. 2022 was $-5 Mil. Its Operating Income for the months ended in Apr. 2022 was $-48 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Apr. 2022 was $276 Mil.

Palo Alto Networks's Interest Coverage for the quarter that ended in Apr. 2022 is

Palo Alto Networks did not have earnings to cover the interest expense.

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Palo Alto Networks's Debt to Revenue Ratio for the quarter that ended in Apr. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Apr. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(3675.7 + 275.7) / 5546.8
=0.71

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Palo Alto Networks has a Z-score of 2.89, indicating it is in Grey Zones. This implies that Palo Alto Networks is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.89 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

* 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.


Palo Alto Networks  (NAS:PANW) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Palo Alto Networks has the Financial Strength Rank of 4.


Palo Alto Networks Financial Strength Related Terms

Thank you for viewing the detailed overview of Palo Alto Networks's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Palo Alto Networks Business Description

Palo Alto Networks logo
Traded in Other Exchanges
Address
3000 Tannery Way, Santa Clara, CA, USA, 95054
Palo Alto Networks is a pure-play cybersecurity vendor that sells security appliances, subscriptions, and support into enterprises, government entities, and service providers. The company's product portfolio includes firewall appliances, virtual firewalls, endpoint protection, cloud security, and cybersecurity analytics. The Santa Clara, California, firm was established in 2005 and sells its products worldwide.
Executives
Paul Josh D. officer: Chief Accounting Officer 3000 TANNERY WAY SANTA CLARA CA 95054
Jenkins William D Jr officer: President C/O BARRACUDA NETWORKS INC 3175 S WINCHESTER BLVD CAMPBELL CA 95008
Bawa Aparna director C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Golechha Dipak officer: EVP, Chief Financial Officer 3000 TANNERY WAY SANTA CLARA CA 95054
Gayle Helene D director C/O COLGATE PALMOLIVE COMPANY 300 PARK AVENUE NEW YORK NY 10022
Visoso Luis Felipe officer: EVP, Chief Financial Officer C/O UNITY SOFTWARE INC. 30 3RD STREET SAN FRANCISCO CA 94103
Key John P. director 3000 TANNERY WAY SANTA CLARA CA 95054
Twohill Lorraine director 3250 VAN NESS AVENUE SAN FRANCISCO CA 94109
Singh Amit K. officer: President 3000 TANNERY WAY SANTA CLARA CA 95054
Arora Nikesh director, officer: Chief Executive Officer 3000 TANNERY WAY SANTA CLARA CA 95054
Compeau Jean officer: Chief Accounting Officer 3000 TANNERY WAY SANTA CLARA CA 95054
Bonanno Kathleen officer: EVP, Chief Financial Officer 3000 TANNERY WAY SANTA CLARA CA 95054
Ramaswamy Sridhar director 3000 TANNERY WAY SANTA CLARA CA 95054
Klarich Lee officer: Chief Product Officer 4401 GREAT AMERICA PKWY SANTA CLARA CA 95054
Mccarthy Mary Pat director 2704 WEST 112TH STREET LEAWOOD KS 66211

Palo Alto Networks Headlines

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)