Palo Alto Networks, Inc. — Earnings Quality Grade C
PANW · Technology
Some red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 117 days, change -2 days YoY
AR growth 13.2% vs revenue growth 14.9%
Revenue 14.9%, CFFO 14.1%. Cash follows revenue
Expense Quality
No material inventory
CapEx growth 57.0% is >2x revenue growth 14.9%
SG&A/Gross Profit = 52.3%. Normal
Gross margin 73.4%, change -0.9pp. Stable
Cash Flow Quality
CFFO/NI = 3.28. Profits backed by cash
FCF $3.5B, FCF/NI = 3.06
Accruals ratio = -11.0%. Low accruals
Cash $2.9B covers debt $0.3B
Balance Sheet Health
Goodwill+Intangibles $5.3B = 68% of equity. Over 50%
Debt/EBITDA = 0.2x. Healthy
Other assets 19.5% vs revenue 14.9%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles surged 43% YoY
Manipulation Score
M-Score = -2.80 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08