This PANW analysis sets out to answer the age-old question "Is the PANW stock a good buy right now?". This analysis uses 2 valuation methods to determine a PANW Stock Forecast for 2025, which can help us to answer the "age-old question".

You are probably aware that Palo Alto Networks, Inc. (NASDAQ: PANW) is a leader in the Software—Infrastructure space. In this analysis, we are going to look at some of the key financial ratios for Palo Alto Networks, Inc. to determine a price prediction for PANW. Remember these price predictions take into account several assumptions (which I will highlight) to determine a future price. I'll share my PANW stock price prediction, then show you the approach and assumptions used to calculate the PANW stock forecast for 2025.

Before we go any further, let me start by saying this, stock forecasting is hard. I don't know what the future will hold, and neither do Wall Street Analysts. If they could accurately predict the future, they would be able to beat the S&P 500 and I would be extremely wealthy. What I can say is that we can use available data to determine a reasonable PANW stock forecast and helps us make better investment decisions, so hopefully, you find this analysis useful.

PANW Stock Forecast for 2025 is $642.32 Per Share

The Palo Alto Networks, Inc. stock price prediction of $642.32 was derived from 2 main valuation methods (which are averaged for the final price target you see above). I'll dive into the approach to show you how I determined how I “predicted” a stock price of $642.32 for PANW.

Palo Alto Networks, Inc. Financial Growth Metrics
PANW Comparable Companies Analysis

The Financial growth Metrics provide an analytics valuation approach to determining a reasonable PANW stock forecast. The comparable companies analysis determines PANW stock forecast by comparing PANW's financial ratios to the average financial ratios of a group of similar stocks.

PANW Stock Forecast Using PE Ratio and EPS

For this part of the analysis, I am looking at the history of key financial metrics for Palo Alto Networks, Inc. to forecast the stock into 2022 and 2025. Most investors know that historical performance does not guarantee future performance, but it is useful to see how PANW has been trending.

PANW Forward Earnings Per Share is forecasted to be $9.25 by 2023, and grow at a CAGR of 27.37% until 2026. Knowing this, we can estimate PANW's EPS to be $15.01/share in 2025. Furthermore, PANW has a forward P/E ratio of 56.25 in 2025. Now we have enough information to determine a PANW stock forecast for 2025 by multiplying the P/E by the EPS, which gives us a stock price prediction of $844.31 per share (or a 63.23% upside).

There are other ways to predict the price for PANW but I would argue that P/E, EPS, and Earnings Growth are the most commonly used financial metrics by analysts and investors. This is why I used them to forecast PANW's stock price.

PANW Stock Forecast for 2025 Using Comparable Analysis

Who are Palo Alto Networks, Inc.'s Competitors?

In order to undergo a comparable analysis, we need to outline PANW's main competitors. These competitors need to have; a stock, valid financial ratios, operations similar to PANW, and a market cap similar to PANW (if possible).

By keeping this in mind, I found the following list of companies to be some of PANW stocks' closest competitors:

ORCL, NLOK, FTNT, and CHKP

Using a Comparable Analysis to Determine a PANW Price Forecast

Price to Sales (P/S): PANW's current P/S ratio is 9.92, compared to the average P/S ratio of PANW's peers being 7.95. This implies that PANW is overvalued and their share price should change by a factor of -19.90% to be at fair value (based on PANW's P/S compared to the P/S of their peers).
Enterprise Value to Assets (EV/Assets): PANW stock EV/Assets ratio is currently 4.27, compared to the average EV/Assets ratio of PANW's peers being 3.85. This implies that PANW is overvalued and their share price should change by a factor of -9.84% to be at fair value (based on PANW's EV/Assets compared to the EV/Assets of their peers).

Overall, PANW stock is overvalued and needs to experience a change in its stock price of (an average of) -14.87% to be considered “at fair value”. Applying this percentage change to PANW's current price of $517.25 implies a forecasted price of $440.33

Are the PANW Analyst Ratings in Agreeance With Our Conclusion?

Analyst Ratings have provided a relatively strong indicator of future price movement, which is why they are used to (hopefully) support our PANW stock forecast. There are a total of 37 analyst ratings for PANW, which are distributed as follows:

32 Buys

5 Holds

0 Sells

The overwhelming majority of analysts are bullish on the PANW stock and have given it a "buy" rating. Furthermore, the rest of the analysts are all neutral on the PANW stock and have thus given it a "hold" rating. Overall, this is very bullish as all the analysts agree that PANW is at or below its fair market value.

PANW Stock Forecast and Price Prediction Summary

Should you buy PANW? Well, based on the overall PANW stock forecast of $642.32 (24.18% upside) per share, I would agree with the analysts and say PANW is a buy. Let me know what you think, happy to dive into other aspects of PANW to help you make an informed investment decision.