Intrinsic Value (DCF)
Current$148.92
→
Intrinsic$170.19
+14%
$114.77$170.19$280.34
Market implies 19% growth for 5 years
PANW appears fairly valued — current price aligns with our DCF estimate.
At $149, the market prices in continued high-teens cash flow growth (19%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $115 → Bull $280. Current price implies expectations below the base case, but well above the bear case.
| Discount ↓Growth → | 18% | 20% | 22% | 24% |
|---|---|---|---|---|
| 8% | $214 | $231 | $250 | $270 |
| 10% | $146 | $158 | $170 | $183 |
| 12% | $111 | $119 | $128 | $138 |
| 14% | $89 | $95 | $102 | $110 |
Bull Case
- Bull case ($280) offers 88% upside at 26% growth, 8% discount
- 12% margin of safety vs. base case estimate
- Market-implied growth (19%) ≤ historical CAGR (22%)
Bear Case
- Bear case ($115) implies 23% downside at 18% growth, 12% discount
- Using 22% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection
Year 1$4.23B
Year 2$5.17B
Year 3$6.30B
Year 4$7.69B
Year 5$9.39B
Terminal$148.76B
📐 Model Inputs
Growth Rate22.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$3.47BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.