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STOCK COMPARISON

Microsoft vs Palo Alto Networks: Fair Value & Quality

Both stocks run through our valuation models. Here is how Microsoft (MSFT) and Palo Alto Networks (PANW) compare, as of Sep 25, 2026.

As of Sep 25, 2026, Fair Value Calculator sees Microsoft as the more attractively valued of the two: Microsoft trades at $498 versus a fair value of $551 (+11%), while Palo Alto Networks trades at $390 versus $115 (-71%).
Microsoft
MSFT · USD · Information Technology
+11%
upside to fair value
undervalued
Price$498
Fair Value$551
Quality66/100
Palo Alto Networks
PANW · USD · Information Technology
-71%
upside to fair value
overvalued
Price$390
Fair Value$115
Quality57/100
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Head-to-head numbers

Green is the better side of a row, red the weaker one (for valuation multiples: lower = cheaper). Grey rows are for reference only and are not scored.

betterweakerfor reference, not scored

MicrosoftPalo Alto Networks
Valuation
27.8×P/E (TTM)339.1×
28.8×P/E ex one-offs134.5×
11.18×P/S (TTM)26.08×
8.39×P/B35.35×
19.2×EV/EBITDAn/a
1.62×PEG3.97×
+10.6%Fair value upside−70.6%
0.7%Dividend yieldn/a
$3.64Dividend per sharen/a
Profitability
45%Operating margin-2%
1.13×EBIT margin trend (5Y)n/a
34%Return on equity5%
14%Return on assets2%
Growth
18%Revenue growth (YoY)31%
16.1%Avg. growth/yr (3Y)18.8%
14.6%Avg. growth/yr (5Y)22.0%
+17.5%Value creation/yr+44.9%
Balance & size
50.9×Interest coverage (EBIT/interest)414.3×
0.07×Debt / equity0.21×
$3.7TMarket cap$277B
expensiveGrowth qualityhealthy
The P/E excluding one-off items is scored: for at least one of the two companies, special items (write-downs, restructuring, litigation) move the reported P/E by 15 % or more. The trailing P/E is shown for reference.

Microsoft leads: 8 to 5 metric wins.

n/a = not meaningfully computable, for example with negative equity.

Quality in detail

The quality score, broken down into the same factor families as on the stock page, 0 to 100 per family.

Microsoftof which business quality 64 · market factors 63 Palo Alto Networksof which business quality 61 · market factors 83
ProfitabilityMargins and returns on capital today
76
45
Quality GrowthAre margins and returns improving?
64
50
CashflowEarnings quality: real cash, not paper profit
61
99
Fin. StrengthBalance sheet, leverage, solvency risk
79
72
InvestmentDisciplined investing over empire-building
0
32
Low VolatilityCalm price path (market factor)
58
49
MomentumPrice trend over the last 3–12 months (market factor)
70
97
52W MomentumDistance to the 52-week high (market factor)
55
99
Net IssuanceShare count: buybacks or dilution?
83
47

What the models say

How far the median fair value (base case) per model family sits from the current price, in percent. The amount in the currency of the trading venue is shown underneath.

above the price, more than 15% above close to the price, 85% to 115% of the price below the price, more than 15% below

Model familyMicrosoftPrice $498Palo Alto NetworksPrice $390
DCF Models-24%below the price$376-79%below the price$82.60
Earnings-Based-49%below the price$252-89%below the price$41.50
Dividend Discount-86%below the price$68.03n/a
Multiples-22%below the price$387-92%below the price$29.26
Asset-Based-92%below the price$39.92-98%below the price$6.43
Growth DCF-47%below the price$264-75%below the price$96.87
Economic Profit-54%below the price$231-96%below the price$14.26
Growth Earnings-12%close to the price$440-85%below the price$57.25
Minimum-92%below the price$39.92-98%below the price$6.43
Maximum-12%close to the price$440-75%below the price$96.87
Median-48%below the price$258-89%below the price$41.50
Geometric mean-60%below the price$201-91%below the price$33.86

Minimum, maximum, median and geometric mean refer to the family values in this table. Geometric because deviations are ratios: half the price and twice the price average to 100%, not 125%.

Microsoft: 21 of 26 models see the stock below the current price.

Palo Alto Networks: 24 of 24 models see the stock below the current price.

Scenario ranges

From our cautious bear scenario to the optimistic bull scenario. The white tick is the current price (value above it), the green tick the fair value (value below it): if the price sits left of the fair value, there is room to rise.

Microsoft
Price $498
Fair Value $551
Bear $275Bull $717
Palo Alto Networks
Price $390
Fair Value $115
Bear $80.16Bull $149

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Ranked within their sector

Where each stock sits within its sector peer group. Band = middle 50% of peers, tick = median, dot = this stock.

Microsoft · Information Technology

Quality score66 · Top 25%
Fair value upside+11% · above median

Palo Alto Networks · Information Technology

Quality score57 · above median
Fair value upside-71% · bottom 25%

Bottom line

As of Sep 25, 2026, Fair Value Calculator sees Microsoft as the more attractively valued of the two: Microsoft trades at $498 versus a fair value of $551 (+11%), while Palo Alto Networks trades at $390 versus $115 (-71%).

Microsoft has the higher quality score (66/100).

Open Microsoft live analysis →

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A model-based valuation snapshot from 26 models. Values change with price and fundamentals; the date shown above applies.