Head-To-Head Comparison: Palo Alto Networks (PANW) & Its Rivals

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

Earnings and Valuation

This table compares Palo Alto Networks and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Palo Alto Networks	$11.48 billion	$307.00 million	615.37
Palo Alto Networks Competitors	$1.80 billion	$385.92 million	108.64

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

Profitability

This table compares Palo Alto Networks and its rivals’ 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	-612.66%	21.01%	-8.93%

Insider and Institutional Ownership

79.8% of Palo Alto Networks shares are held by institutional investors. Comparatively, 41.8% of shares of all “Software” companies are held by institutional investors. 1.4% 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 hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Palo Alto Networks and its rivals, as reported 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	5748	21526	44879	1497	2.57

Palo Alto Networks currently has a consensus target price of $398.55, suggesting a potential upside of 26.99%. As a group, “Software” companies have a potential upside of 28.88%. Given Palo Alto Networks’ rivals higher probable upside, analysts plainly believe Palo Alto Networks has less favorable growth aspects than its rivals.

Risk & Volatility

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

Summary

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

Palo Alto Networks Company Profile

Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; and Panorama, a security management solution for the global control of network security platform as a virtual or a physical appliance. It also provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection, DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention. In addition, the company offers cloud security, secure access, security operations, and threat intelligence and security consulting; professional services, including architecture design and planning, implementation, configuration, and firewall migration; education services, such as certifications, as well as online and in-classroom training; and support services. It sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers, and government entities operating in various industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications. Palo Alto Networks, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.