Palo Alto Networks Inc (PANW)

Return on equity (ROE)

		Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Net income	US$ in thousands	2,577,600	439,700	-267,000	-498,900	-267,000
Total stockholders’ equity	US$ in thousands	5,169,700	1,748,400	210,000	634,500	1,101,800
ROE		49.86%	25.15%	-127.14%	-78.63%	-24.23%

July 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $2,577,600K ÷ $5,169,700K
= 49.86%

Palo Alto Networks Inc's return on equity (ROE) has shown significant fluctuations over the past five years. The ROE was negative in 2020 and 2021, indicating that the company was not generating sufficient profits relative to its shareholders' equity during those periods. However, there was a notable turnaround in 2022, with ROE jumping to -127.14%. This sharp increase suggests a significant improvement in the company's profitability compared to the previous years.

In the most recent two years, 2023 and 2024, Palo Alto Networks Inc's ROE continued to improve significantly, reaching 25.15% and 49.86%, respectively. These positive ROE figures indicate that the company has been able to generate healthy returns on the equity invested by shareholders. The substantial growth in ROE over the past few years may reflect improved operational efficiency, better cost management, or increased revenue generation.

Overall, while the company faced challenges in generating satisfactory returns for shareholders in the past, the recent trend of increasing ROE suggests that Palo Alto Networks Inc has made strides towards enhancing profitability and creating value for its investors. However, it would be important to monitor future performance to ensure that this positive trend continues.