Analysts at Wedbush hiked their price target on Palo Alto Networks Inc (NYSE:PANW) by 28.9% while noting that the company’s cyber security cloud growth story was just getting started.
The analysts maintained their Outperform rating and put Palo Alto Networks on the Wedbush Best Ideas List, while raising their price target from $225 to $290 reflecting their incrementally bullish field checks.
“Based on our recent checks we believe the PANW cloud growth story is set to hit its next stage of growth and remains in a golden position of success over the next 12 to 18 months,” wrote Wedbush analysts in a note to clients.
“We believe the risk/reward on this cyber security bellwether makes it a table pounder at current levels as the free cash flow story ramps further in Jokic-like fashion heading into FY24.”
Wedbush noted that the Santa Clara-based, California company is in "the right place at the right time."
“In particular we believe PANW is seeing considerable strength with major expansions within its installed base as more enterprises move to the cloud with the PANW platform,” said the analysts.
“Some large deal activity in the federal vertical could be a shining star yet again the next few quarters for the company as we believe PANW is very well positioned within the Beltway as a major cloud transformation takes place in the 202 area code with cyber security front and center as a concern.”
Wedbush observed that cloud activity continues to be a “key area of strength” and enables the firm to win more complex enterprise installed base deals which are getting green lighted despite a murky macro environment.
“We believe there is a $200 billion dollar growth opportunity in cloud security alone “up for grabs” over the next few years for those vendors such as PANW that have the solution sets to protect critical cloud deployments from growing threats/attacks,” concluded the analysts.
For Wedbush, Palo Alto Networks is one of its favorite cyber security and tech names to own. It believe Street numbers remain conservative as the "beat and raise specialist" is in an enviable position into the next few quarters.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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