Palo Alto Networks (PANW) closed at $346.95 on October 19 and has returned 104.62% over six months. Revenue rose 34.50% last quarter, yet reported profit was only $307 million on $11.48 billion of revenue. Share-based compensation and related charges reached $1.71 billion in the last fiscal year, more than double operating profit, while operating cash flow hit $4.55 billion. The article argues that stock-paid wages are still a real cost because they dilute existing shareholders. At 94.34 times analysts' next-year earnings estimates, the valuation depends on whether share-based pay is added back, since the multiple relies on adjusted earnings rather than reported profit.
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