Palo Alto Networks Inc (NYSE:PANW)’s cloud transformation is well underway, and the company is becoming the dominant cybersecurity sector player as larger more strategic deals are being signed heading into 2024, according to Wedbush analysts.
In an update to clients, the analysts raised their target price on PANW stock to $350 from $290, while maintaining an ‘Outperform’ rating, citing strong cybersecurity sector and cloud deal momentum heading into 2024.
"While some may fret about PANW's valuation and recent rise we believe the cloud penetration piece of the story is just underway and will result in a major growth tailwind for the next 12 to 18 months," the analysts wrote.
They believe PANW is incrementally well positioned to gain more market share in the cybersecurity sector going forward and think recent SEC guidelines could be a "major benefit” for the company in 2024.
In addition, analysts at Wedbush estimate that cloud security is a $200 billion growth opportunity over the next few years with just 46% of workloads currently on the cloud today, with that number poised to reach 70% by 2025.
They call PANW one of their favorite cybersecurity names to own in 2024.
Shares of Palo Alto Networks slipped 3% to $304.94 in midday trading on Thursday but have gained 120% year to date.