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Palo Alto Networks Inc. — Beer Score

PANW · US Equity · Tech — Cybersecurity
$395.00
Market Price (indicative) · Feb 7, 2026
−$2.80 (−0.70%) today
Reference price only. Not an official exchange feed.
38
/ 100
Getting Foamy — Est. 62% Speculation
Updated: Feb 7, 2026 16:30 UTC·Filing: 10-Q (Nov 4, 2025)·Model: DCF v1.0
Not investment advice · Model-based estimate
Estimated Value (Beer)
$150.10
38%
Est. Speculation Premium (Foam)
$244.90
62%
🍺 38% Est. Fundamental Value🫧 62% Est. Speculation
Track Score Alerts (Pro) See Model Assumptions ↓

Key Financials

TTM
Revenue$8.0B
Net Income$1.0B
Free Cash Flow$3.0B
P/E Ratio129x
EPS (TTM)$3.06
Market Cap$129B
Total Debt$2.0B
Cash & Equiv.$3.6B

DCF Valuation

Model Estimate
$150
Est. intrinsic value (DCF model)
vs $395.00 market price
↓
Our model suggests the current price is ~163% above the estimated intrinsic value. The market may be pricing in growth beyond current fundamentals.
WACC11.0%
Growth Rate (5yr)18%
Terminal Growth3%
Margin of Safety~−163%

Model output varies with assumptions (WACC, growth, margins). This is not a price target or investment recommendation.

Score History — 90 Days

Pro
90d Low
34
90d High
42
Zone Changes
3
▸_
Unlock Full Score HistoryAlerts · Chart export · Peer compare

Palo Alto Stock Valuation — Beer Score Breakdown

Palo Alto's Beer Score of 38 means that, according to our DCF model, the stock is trading well above our model's estimated intrinsic value. Only an estimated 38% of the price is backed by current fundamentals — 62% appears to be speculation premium.

How Beer Score Is Calculated for PANW

We pull Palo Alto's latest SEC filings from EDGAR, run a DCF analysis using a 11.0% WACC and 18% revenue growth rate over 5 years with 3% terminal growth, then compare the resulting model estimate ($150) against the current market price ($395.00). The Beer Score of 38 represents the ratio. Model output varies with assumptions. Learn more about our methodology →

Important Information

Beer Score is an educational indicator, not investment advice. It measures the model-estimated gap between a stock's current market price and an estimated intrinsic value derived from public financial data. A low Beer Score does not mean "sell" and a high score does not mean "buy." Model output varies with assumptions (WACC, growth rate, terminal growth, margins).

Prices shown are indicative reference prices for educational purposes only and are not sourced from an official exchange feed. Data sources include SEC EDGAR filings, indicative market price data, and proprietary DCF models. Scores update daily after market close. For the full ranking of all 45 stocks, visit the Beer Score Heatmap or read Today's Foam Report.

Track Palo Alto's Beer Score Over Time

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About This Valuation

Why does Palo Alto have a Beer Score of 90?
Palo Alto (PANW) scores 90 because the stock is currently trading approximately -10% below its estimated intrinsic value of $150. With $3.0B in annual free cash flow and $8.0B in revenue, the company's fundamentals more than support the current market price of $166.95 per share. The Beer Score reflects that 90% of the price is backed by estimated fundamental value.
Is PANW overvalued or undervalued?
Based on our DCF model, Palo Alto appears undervalued. The estimated intrinsic value of $150 compared to the current price of $166.95 suggests a meaningful margin of safety. This is a model-based estimate using 11.0% WACC and 18% projected growth — not a buy or sell recommendation. The actual fair value depends on assumptions that may change with new earnings data or market conditions.
What assumptions drive the $150 intrinsic value?
The DCF model uses a 11.0% weighted average cost of capital and projects 18% annual revenue growth over five years. Terminal growth is set at 3%. Starting from $3.0B in current free cash flow, these assumptions produce an estimated intrinsic value of $150 per share. The model is most sensitive to the growth rate and WACC inputs — small changes in either significantly alter the output.
What could change Palo Alto's Beer Score?
Palo Alto Networks' pivot to platformization is driving consolidated security spending wins. If the strategy succeeds in displacing point solutions, revenue per customer rises significantly. However, the transition to annual recurring revenue has temporarily depressed billings growth, concerning some investors. Competition from CrowdStrike and Zscaler in specific security categories remains intense.

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