PANW’s One-Month Rally Offers a Chance to Reevaluate MSFT
Microsoft (MSFT) offers superior revenue growth across key periods, better profitability, and relatively lower valuation vs Palo Alto Networks (PANW), suggesting you may be better off investing in MSFT
- MSFT’s quarterly revenue growth was 18.1%, vs. PANW’s 15.8%.
- In addition, its Last 12 Months revenue growth came in at 14.9%, ahead of PANW’s 14.9%.
- MSFT leads on profitability over both periods – LTM margin of 45.6% and 3-year average of 44.0%.
PANW provides global cybersecurity solutions, including firewall appliances, security management, and subscription services for threat prevention, malware protection, URL filtering, and device security. MSFT develops and supports software, services, and devices, offering productivity tools, business solutions, and Windows OEM licensing.
Valuation & Performance Overview
| PANW | MSFT | Preferred | |
|---|---|---|---|
| Valuation | |||
| P/EBIT Ratio | 103.6 | 29.2 | MSFT |
| Revenue Growth | |||
| Last Quarter | 15.8% | 18.1% | MSFT |
| Last 12 Months | 14.9% | 14.9% | MSFT |
| Last 3 Year Average | 18.9% | 12.5% | PANW |
| Operating Margins | |||
| Last 12 Months | 13.5% | 45.6% | MSFT |
| Last 3 Year Average | 9.2% | 44.0% | MSFT |
| Momentum | |||
| Last 3 Year Return | 116.4% | 97.5% | PANW |
Note: For “Last 3 Year Return” metric, preferred stock is one with higher returns unless the returns are too high (>300%) which creates risk of sell off.
See more revenue details: PANW Revenue Comparison | MSFT Revenue Comparison
See more margin details: PANW Operating Income Comparison | MSFT Operating Income Comparison
But do these numbers tell the full story? Read Buy or Sell MSFT Stock to see if Microsoft’s edge holds up under the hood or if Palo Alto Networks still has cards to play (see Buy or Sell PANW Stock).
That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Historical Market Performance
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total [1] | Avg | Best | |
|---|---|---|---|---|---|---|---|---|---|
| Returns | |||||||||
| PANW Return | 54% | 57% | -25% | 111% | 23% | 7% | 394% | <=== | |
| MSFT Return | 43% | 52% | -28% | 58% | 13% | 19% | 238% | ||
| S&P 500 Return | 16% | 27% | -19% | 24% | 23% | 10% | 101% | ||
| Monthly Win Rates [3] | |||||||||
| PANW Win Rate | 58% | 83% | 42% | 58% | 58% | 71% | 62% | ||
| MSFT Win Rate | 67% | 75% | 25% | 67% | 58% | 57% | 58% | ||
| S&P 500 Win Rate | 58% | 75% | 42% | 67% | 75% | 62% | 63% | <=== | |
| Max Drawdowns [4] | |||||||||
| PANW Max Drawdown | -43% | -11% | -26% | -4% | -11% | -16% | -18% | ||
| MSFT Max Drawdown | -14% | -5% | -36% | -7% | -2% | -16% | -13% | ||
| S&P 500 Max Drawdown | -31% | -1% | -25% | -1% | -2% | -15% | -12% | <=== | |
[1] Cumulative total returns since the beginning of 2020
[2] 2025 data is for the year up to 9/8/2025 (YTD)
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
No matter how good the numbers, stock investment is never a smooth ride. There is a risk you must factor in. Read PANW Dip Buyer Analyses to see how the stock has fallen and recovered in the past.