Microsoft Corporation (MSFT) vs Palo Alto Networks, Inc. (PANW)

Microsoft Corporation and Palo Alto Networks, Inc. are both Software Infrastructure companies. Microsoft Corporation is the larger, with a market value of $3.98T against $257.6B — 15.4× the size. Microsoft Corporation trades at the lower P/E: 27.7× against 591×. Palo Alto Networks, Inc. grew revenue faster over the last twelve months: 24.5% against 17.9%. Microsoft Corporation has the higher net margin (41.2% vs 2.67%) and the higher return on invested capital (23.1% vs 1.66%). Across the 22 metrics below, Microsoft Corporation leads on 14 and Palo Alto Networks, Inc. on 8.

Valuation

Metric MSFT PANW Software Infrastructure median
P/E 27.66 591.32 24.52
P/S 11.39 20.45 2.78
P/B 8.39 8.54 2.84
Price to free cash flow 65.81 57.07 18.22
EV/EBITDA 19.08 108.10 13.98
EV/Sales 11.31 20.35 2.92
Earnings yield 3.62% 0.17% 0.00%
Free cash flow yield 1.52% 1.75% 0.37%

Profitability

Metric MSFT PANW Software Infrastructure median
Gross margin 67.66% 70.36% 57.91%
Operating margin 47.10% 6.05% 0.00%
Net margin 41.17% 2.67% 0.00%
Free cash flow margin 17.31% 35.83% 0.00%
Return on equity 34.22% 1.74% 0.00%
Return on assets 20.15% 0.85% 0.00%
Return on invested capital 23.10% 1.66% 0.00%

Growth

Metric MSFT PANW Software Infrastructure median
Revenue growth (TTM) 17.91% 24.50% 14.42%
EPS growth (last fiscal year) 31.60% (75.00%) 17.35%
Revenue growth, 5-year CAGR 14.57% 21.95% 16.15%
Net income growth, 5-year CAGR 16.90% 0.00% 0.00%

Health

Metric MSFT PANW Software Infrastructure median
Debt to equity 0.08 0.06 0.02
Current ratio 1.22 0.87 1.53
Net debt to EBITDA (0.19) (0.60) 0.05

Dividend

Metric MSFT PANW Software Infrastructure median
Dividend yield 0.69% — 1.04%
Payout ratio 0.19 — 0.29

Size

Metric MSFT PANW Software Infrastructure median
Market cap 3.98t 257.64b 606.60m

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