Palo Alto Networks gains after BTIG upgrades to Buy

Shares of Palo Alto Networks (NASDAQ:PANW [https://seekingalpha.com/symbol/PANW]) rose 2% after BTIG upgraded rating to Buy, citing “greater confidence” in the cybersecurity company’s ability to achieve growth targets calling for 14% total revenue growth.

BTIG also set a PT of $248 per share on the stock, saying that the company should be able to sustain high teens FCF growth in the next few years.

Palo Alto was trading at $212.94 on Monday. The company’s stock has gained 17% so far this year, compared to the 11% rise in the broader S&P 500 Index.

“Looking forward, with the NGS portfolio increasing to 65%+ of the revenue mix in FY27, we think PANW can maintain 12%+ growth over the next few years,” the brokerage said.

BTIG analyst Gray Powell said the brokerage is not looking for material upside on NGS ARR this year but thinks PANW’s 26%+ growth target is achievable.

Earlier in July, Palo Alto Networks has agreed to acquire identity security firm CyberArk (CYBR [https://seekingalpha.com/symbol/CYBR]) at an equity value of approximately $25B for CyberArk, marking Palo Alto’s official entry into identity security, making it a key part of the company’s multi-platform strategy.

“We are seeing more compelling opportunities across the asset and think PANW should be able to maintain 20%+ growth on the CYBR side of the business after the acquisition closes,” noted Powell.

Seeking Alpha analysts and Seeking Alpha’s Quant ratings are neutral and consider the stock a Hold [https://seekingalpha.com/symbol/PANW/ratings/quant-ratings]. In contrary, Wall Street rated it a Buy.

Wedbush, last month, added Palo Alto Networks to its Best Ideas list.

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