7 Analysts On Palo Alto Networks And Its Journey To Reach A $100B Market Cap

Palo Alto Networks Inc.’s PANW stock climbed Monday after the Santa Clara, California-based company reported strong quarterly earnings and announced a 3-for-1 stock split.

KeyBanc Capital Markets On Palo Alto Networks

Analyst Michael Turits reiterated an Overweight rating, while raising the price target from $630 to $680.

Palo Alto Networks reported strong billings for the quarter, driven by “large deals with a strong subscription component,” Turits wrote in a note.

“While we expect less preorder and price tailwind to FY23 hardware, we see strong drivers for Palo's next gen (software/cloud) products better insulating it from that product cycle and positioning it well as a consolidator of both on prem and cloud security,” the analyst added.

Raymond James On Palo Alto Networks

Analyst Adam Tindle maintained an Outperform rating, while raising the price target from $610 to $640.

The company reported higher-than-expected revenue, billings, and EPS, “despite a mixed macro environment that has seen other software businesses with exposure to Enterprise customers experiencing caution around incremental spending,” Tindle said in a note.

“Instead, Palo delivered a ~15% Billings beat vs prior guidance midpoint to accelerate Billings growth to mid-40% y/y (from high-20% y/y during F1Q22) despite quarterly comparisons becoming increasingly difficult,” the analyst wrote. “In short, the business is humming."

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Wedbush On Palo Alto Networks

Analyst Daniel Ives reaffirmed an Outperform rating, while raising the price target from $580 to $620.

“PANW delivered another stellar quarter in which the company beat the Street across the board and gave healthy FY23 guidance that was well above whisper expectations as it appears the company's cloud-driven strategy is resonating increasingly well with cyber security customers in the field,” Ives wrote in a note. “Billings was the star of the show in FY4Q,” he added.

“The shift to cloud is a massive tailwind for PANW as the company is in the right spot at the right time to benefit from this multi-year wave of cyber security enterprise spending, despite an uncertain macro backdrop,” the analyst continued.

Morgan Stanley On Palo Alto Networks

Analyst Hamza Fodderwala reiterated an Overweight rating and a price target of $823.

“Another blowout result in FQ4, with accelerating topline and FY23 outlook ahead of consensus highlights PANW's broader platform traction,” Fodderwala said. “Coupled with improving margins, increased buyback and positive GAAP EPS, we remain convicted in path to $100bln market cap in 2 years,” he added.

Mizuho Securities On Palo Alto Networks

Analyst Gregg Moskowitz maintained a Buy rating, while raising the price target from $600 to $660.

“We were right to expect only a narrow revenue beat in F4Q. But in the end, it didn't matter, as total billings growth of 44% Y/Y was much better than expected and trounced our and the Street's ~25% growth forecast,” Moskowitz wrote.

“More broadly, we remain very constructive on PANW's improving mix shift toward higher-growth recurring revenue, and we reiterate our view that the co. clearly possesses the strongest array of cloud assets among traditional network security vendors,” he added.

RBC Capital Markets On Palo Alto Networks

Analyst Matthew Hedberg reaffirmed an Outperform rating, while raising the price target from $680 to $700.

“Outperformance again came from across the portfolio and growth remains ~2x the industry, which we think should continue to drive share gains,” Hedberg mentioned.

“The initial outlook for FY/23 was impressive and should have enough flexibility for different scenarios while confidence remains strong around prior FY/24 targets,” he added.

JMP Securities On Palo Alto Networks

Analyst Trevor Walsh reiterated a Market Outperform rating and a price target of $620.

The company reported strong results, “despite labor inflation and supply-side pressures,” Walsh said. “Palo Alto Networks continues to perform ahead of consensus expectations on both growth/profitability.”

PANW Price Action: Shares of Palo Alto Networks had jumped by 10.67% to $562.26 at the time of publication Tuesday.