Analyzing Palo Alto Networks (PANW) & Visa (NYSE:V)

Palo Alto Networks (NYSE: PANW) and Visa (NYSE:V) are both large-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Volatility and Risk

Palo Alto Networks has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Visa has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Earnings and Valuation

This table compares Palo Alto Networks and Visa’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Palo Alto Networks $1.76 billion 7.45 -$216.60 million ($2.46) -58.09
Visa $18.36 billion 12.12 $6.70 billion $2.80 38.37

Visa has higher revenue and earnings than Palo Alto Networks. Palo Alto Networks is trading at a lower price-to-earnings ratio than Visa, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Palo Alto Networks and Visa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Palo Alto Networks 1 8 32 0 2.76
Visa 0 2 27 0 2.93

Palo Alto Networks presently has a consensus target price of $163.74, suggesting a potential upside of 14.59%. Visa has a consensus target price of $115.93, suggesting a potential upside of 7.91%. Given Palo Alto Networks’ higher probable upside, research analysts plainly believe Palo Alto Networks is more favorable than Visa.

Profitability

This table compares Palo Alto Networks and Visa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Palo Alto Networks -11.97% -15.77% -3.67%
Visa 36.49% 31.80% 12.89%

Dividends

Visa pays an annual dividend of $0.78 per share and has a dividend yield of 0.7%. Palo Alto Networks does not pay a dividend. Visa pays out 27.9% of its earnings in the form of a dividend. Palo Alto Networks has raised its dividend for 8 consecutive years.

Institutional and Insider Ownership

80.0% of Palo Alto Networks shares are held by institutional investors. Comparatively, 81.9% of Visa shares are held by institutional investors. 4.8% of Palo Alto Networks shares are held by company insiders. Comparatively, 0.1% of Visa shares are held by company 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.

Summary

Visa beats Palo Alto Networks on 10 of the 16 factors compared between the two stocks.

About Palo Alto Networks

Palo Alto Networks, Inc. offers a next-generation security platform. The Company’s security platform consists of three elements: Next-Generation Firewall, Advanced Endpoint Protection and Threat Intelligence Cloud. Its Next-Generation Firewall delivers application, user and content visibility and control, as well as protection against network-based cyber threats integrated within the firewall through its hardware and software architecture. Its Advanced Endpoint Protection prevents cyber attacks that run malicious code or exploit software vulnerabilities on a range of fixed and virtual endpoints and servers. Its Threat Intelligence Cloud provides central intelligence capabilities, security for software as a service applications and automated delivery of preventative measures against cyber attacks. Its products and services include firewall appliances, panorama, virtual system upgrades, subscription services, support and maintenance, and professional services.

About Visa

Visa Inc. (Visa) is a payments technology company that connects consumers, merchants, financial institutions, businesses, strategic partners and government entities to electronic payments. The Company operates through payment services segment. The Company enables global commerce through the transfer of value and information among the participants. The Company’s transaction processing network facilitates authorization, clearing and settlement of payment transactions and enables to provide its financial institution and merchant clients a range of products, platforms and value-added services. The Company is a retail electronic payment network based on payments volume, number of transactions and number of cards in circulation. Its products/services include core products, processing infrastructure, transaction processing services, digital products, merchant products, and risk products and payment security initiatives.

Receive News & Ratings for Palo Alto Networks Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Palo Alto Networks Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply