Palo Alto Networks (PANW) versus Visa (V) Financial Survey

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Palo Alto Networks and Visa, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Palo Alto Networks 1 10 30 0 2.71
Visa 0 2 27 0 2.93

Palo Alto Networks presently has a consensus price target of $163.18, indicating a potential upside of 9.23%. Visa has a consensus price target of $115.93, indicating a potential upside of 4.02%. Given Palo Alto Networks’ higher probable upside, equities analysts plainly believe Palo Alto Networks is more favorable than Visa.

Risk and Volatility

Palo Alto Networks has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Visa has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

78.3% of Palo Alto Networks shares are held by institutional investors. Comparatively, 82.1% of Visa shares are held by institutional investors. 4.8% of Palo Alto Networks shares are held by insiders. Comparatively, 0.1% of Visa shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Palo Alto Networks and Visa’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Palo Alto Networks $1.76 billion 7.80 -$216.60 million ($2.39) -62.51
Visa $18.36 billion 12.60 $6.70 billion $2.80 39.80

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.

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 -12.57% -19.72% -4.89%
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. Visa has raised its dividend for 8 consecutive years.

Summary

Visa beats Palo Alto Networks on 11 of the 16 factors compared between the two stocks.

Palo Alto Networks Company Profile

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.

Visa Company Profile

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.

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