Palo Alto Networks Inc (NYSE:PANW) shares climbed nearly 5% to $258.71 in midday trading on Monday and have risen about 6% over the past month.
On Thursday, shares of Palo Alto closed more than 5% lower after the cybersecurity giant reported fiscal first quarter 2024 financial results that beat analyst estimates but forecast total billings for the year that was less than its preview outlook and below expectations.
In a recent update to clients, Jefferies analysts maintained their ‘Buy’ rating on the stock while raising their price target 11% to $285 per share, noting its long-term growth story remains on track.
They specifically cited Palo Alto’s annual recurring revenue (ARR) and free cash flow (FCF) growth as reasons for optimism.
"Guidance for full year 2024 ARR appears more conservative than it was 90 days ago and that doesn't account for any boost from Talon/Dig (acquisitions), which will close in 2Q," the analysts wrote.
They added that the fact the company was able to maintain its FCF guidance for 37%-38% in fiscal 2024 was "impressive" given its reduced billing growth for the year and underpins confidence in Palo Alto’s recurring revenue model over the long term.
Shares of other cybersecurity companies have also performed well over the past month, with Crowdstrike Holdings gaining more than 16%, Check Point Software Technologies rising about 6%, and Zscaler surging more than 18%.
Contact Sean at sean@proactiveinvestors.com