Imperial Capital Cuts Price Target on Palo Alto Networks (PANW) to $180; Reiterates Outperform
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Imperial Capital maintained an Outperform rating on Palo Alto Networks (NYSE: PANW), and cut the price target to $180.00 (from $190.00), following the company's 1Q earnings report. Imperial believes that PANW remains on track to establish a top-tier leadership position based on its integrated security platform. Analysts expect continued strong growth from
SaaS-based subscription revenue, buoyed by unattached subscriptions, and higher F2H17 growth in
product sales due to increasing larger customer cohorts.
Analyst Michael Kim commented, "We are maintaining our Outperform rating on PANW shares and lowering our one-year price target to $180 from $190 based on comparable valuation of select industry peers. Our price target implies potential upside of 32% above recent levels. We believe PANW is continuing to gain market share over incumbent vendors, though F1Q17 billings growth of 33% year-over-year (yoy) moderated from recent periods due to lengthening sales cycles for larger transactions. During the company’s F1Q17 conference call on 11/21/16, management indicated that purchasing decisions are requiring additional approvals. Although PANW has since closed several of these transactions and the company’s win rates remain consistent, we believe enterprise customers will remain more disciplined around their security spending in the near term."
Shares of Palo Alto Networks closed at $136.26 yesterday.
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