Palo Alto Beneish M Score

PANW
 Stock
  

USD 526.88  10.37  2.01%   

This module uses fundamental data of Palo Alto to approximate the value of its Beneish M Score. Palo Alto M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please check Palo Alto Piotroski F Score and Palo Alto Altman Z Score analysis.
  
Palo Alto Debt Current is fairly stable at the moment as compared to the past year. Palo Alto reported Debt Current of 632.96 Million in 2021. Debt to Equity Ratio is likely to climb to 4.10 in 2022, whereas Total Debt is likely to drop slightly above 1.4 B in 2022. Palo Alto Book Value per Share is fairly stable at the moment as compared to the past year. Palo Alto reported Book Value per Share of 19.30 in 2021. Current Ratio is likely to climb to 1.61 in 2022, whereas Accounts Payable Turnover is likely to drop 54.16 in 2022.
At this time, it appears that Palo Alto Networks is an unlikely manipulator. The earnings manipulation may begin if Palo Alto's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Palo Alto executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Palo Alto's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.22
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.0Focus
Asset Quality1.0Focus
Expense Coverage1.0Focus
Gross Margin Strengs1.04Focus
Accruals Factor1.0Focus
Depreciation Resistance1.0Focus
Net Sales Growth1.08Focus
Financial Leverage Condition0.96Focus

Palo Alto Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Palo Alto's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues4.1 B3.8 B
Significantly Up
Increasing
Slightly volatile
Selling General and Administrative ExpenseB1.8 B
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from Operations1.5 B1.4 B
Significantly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion190.8 M176.9 M
Significantly Up
Increasing
Slightly volatile
Total Assets9.9 B9.2 B
Significantly Up
Increasing
Slightly volatile
InvestmentsB2.8 B
Significantly Up
Increasing
Slightly volatile
Investments Current2.3 B2.1 B
Significantly Up
Increasing
Slightly volatile
Investments Non Current623.1 M661.7 M
Notably Down
Increasing
Slightly volatile
Property Plant and Equipment Net367.3 M340.4 M
Significantly Up
Increasing
Slightly volatile
Trade and Non Trade Receivables722.6 M669.8 M
Significantly Up
Increasing
Slightly volatile
Total Liabilities9.2 B8.5 B
Significantly Up
Increasing
Slightly volatile
Current Assets4.5 B4.2 B
Significantly Up
Increasing
Slightly volatile
Assets Non Current3.6 B3.4 B
Significantly Up
Increasing
Slightly volatile
Current LiabilitiesB4.6 B
Significantly Up
Increasing
Slightly volatile
Liabilities Non Current3.7 B3.4 B
Significantly Up
Increasing
Slightly volatile
Total Debt1.4 B1.6 B
Fairly Down
Increasing
Slightly volatile
Debt Current633.5 M633 M
Slightly Up
Increasing
Slightly volatile
Debt Non Current1.4 B1.6 B
Significantly Down
Increasing
Slightly volatile
Operating Income(358.9 M)(349.7 M)
Fairly Down
Decreasing
Slightly volatile
Gross Margin83.9980.55
Sufficiently Up
Increasing
Slightly volatile

Palo Alto Networks Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Palo Alto's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Palo Alto in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Palo Alto's degree of accounting gimmicks and manipulations.

About Palo Alto Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

190.83 Million

Palo Alto Depreciation Amortization and Accretion is fairly stable at the moment as compared to the past year. Palo Alto reported Depreciation Amortization and Accretion of 176.87 Million in 2021

Palo Alto Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Palo Alto. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues2.27 B2.9 B3.41 B4.26 B3.83 B4.13 B
Total Assets5.82 B6.59 B9.07 B10.24 B9.22 B9.95 B
Current Assets4.13 B3.66 B5.13 B4.65 B4.18 B4.51 B
Assets Non Current1.08 B1.46 B1.81 B2.93 B3.37 B3.63 B
Total Liabilities4.83 B5.01 B7.96 B9.48 B8.53 B9.2 B
Current Liabilities2.14 B2.05 B2.69 B5.12 B4.61 B4.97 B
Total Debt500.2 M524.7 M1.92 B1.43 B1.64 B1.38 B
Operating Income(129.1 M)(54.1 M)(179 M)(304.1 M)(349.71 M)(358.92 M)
Investments1.2 B1.42 B1.44 B2.42 B2.78 B3 B
Investments Current551.2 M630.7 M896.5 M1.84 B2.12 B2.29 B
Gross Margin71.6172.1270.6870.0580.5583.99

Palo Alto ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Palo Alto's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Palo Alto's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Palo Alto Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Palo Alto Networks's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Palo Alto using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Palo Alto Networks based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company was incorporated in 2005 and is headquartered in Santa Clara, California. Palo Alto operates under SoftwareInfrastructure classification in the United States and is traded on NASDAQ Exchange. It employs 11870 people.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Palo Alto without increasing your portfolio risk or giving up expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate.risk-adjusted returns of your individual positions relative to your overall portfolio.

Did you try this?

Run Focused Opportunities Now

   

Focused Opportunities

Build portfolios using our predefined set of ideas and optimize them against your investing preferences
All  Next Launch Module

Currently Active Assets on Macroaxis

Please check Palo Alto Piotroski F Score and Palo Alto Altman Z Score analysis. Note that the Palo Alto Networks information on this page should be used as a complementary analysis to other Palo Alto's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

Complementary Tools for Palo Alto Stock analysis

When running Palo Alto Networks price analysis, check to measure Palo Alto's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Palo Alto is operating at the current time. Most of Palo Alto's value examination focuses on studying past and present price action to predict the probability of Palo Alto's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Palo Alto's price. Additionally, you may evaluate how the addition of Palo Alto to your portfolios can decrease your overall portfolio volatility.
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Is Palo Alto's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Palo Alto. If investors know Palo Alto will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Palo Alto listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Market Capitalization
52.9 B
Quarterly Revenue Growth YOY
0.29
Return On Assets
-0.014
Return On Equity
-0.58
The market value of Palo Alto Networks is measured differently than its book value, which is the value of Palo Alto that is recorded on the company's balance sheet. Investors also form their own opinion of Palo Alto's value that differs from its market value or its book value, called intrinsic value, which is Palo Alto's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Palo Alto's market value can be influenced by many factors that don't directly affect Palo Alto's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Palo Alto's value and its price as these two are different measures arrived at by different means. Investors typically determine Palo Alto value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Palo Alto's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.