Episode
PANW Stock: Revenue +34%, But Its Own Filing Says 16% - We Say SELL (Q4 FY2026)
- Published
- Sep 3, 2026
- Duration seconds
- 910
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Summary
Palo Alto Networks (PANW) Q4 FY2026 — The stock fell 9.3% the next session, from $362.09 to $328.48. Palo Alto beat every line of its own guidance, grew revenue 34.5% to $3.41bn, and guided fiscal 2027 above consensus on both revenue and earnings - and the shares still fell 9.3%. The reason sits in a table the company published three months earlier: on a pro forma basis, as though it had always owned CyberArk and Chronosphere, the combined business grows about 16%, not 34. THE CALL: SELL (3/5, MODERATE) — base-case value ~$231 vs ~$328.48 today. KEY METRICS: - Revenue $3,410m (+34.5%) and adjusted EPS $1.02 - both above the TOP of the 2 June guide ($3.345-3.355bn, $0.96-0.98). The bar was not lowered first; we checked - The company's own pro forma table (April 10-Q, Note 7) puts combined growth at +16.1% for the quarter and +17.4% for nine months - The two quarters that closed before either deal grew +15.7% and +14.9%; the two after grew +31.2% and +34.5% - FY2027 guide: revenue +23.3% but adjusted EPS +8.7% - diluted shares go from 764m to about 845m (+10.7%) - Adjusted operating margin 28.76% (FY25) to 29.23% (FY26) to 29.50% guided - 74bp in three years on 54% more revenue - GAAP: Q4 operating income $172m vs $497m, a net LOSS of $282m (-$0.35); FY2026 GAAP EPS $0.40 vs $1.60 - Cash is the strong part: operating cash flow $4,553m, adjusted free cash flow $4,414m (38.4% margin), net cash $6,132m - But adjusted FCF is struck before $1,712m of share-based compensation (14.9% of revenue) - owner earnings about $2,702m - CyberArk closed 11 Feb 2026 for $21.06bn, $18.49bn of it in 112 million NEW shares; Chronosphere closed 29 Jan for $2.95bn cash - Goodwill $22,010m plus intangibles $7,017m is 59.9% of a $48,460m balance sheet; tangible book value is negative $1,535m - R…