Imperial Capital Raises Price Target on Proofpoint (PFPT) Following Strong 3Q Results

October 21, 2016 1:13 PM EDT
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Price: $80.85 +0.02%

Rating Summary:
    26 Buy, 3 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Imperial Capital reiterated an Outperform rating on Proofpoint (NASDAQ: PFPT), and raised the price target to $85.00 (from $83.00), following the company's 3Q earnings report. PFPT reported revenue of $99.8mn and adjusted EPS of $0.19, exceeding Street revenue estimates of 94.3mn and adjusted EPS estimates of 0.05. Billings grew approximately 40% yoy to $124.8mn, above previous guidance of $114-116mn.

Analyst Michael Kim commented, "We are maintaining our Outperform rating on PFPT shares and raising our one-year price target to $85 from $83 based on our higher outlook. Our price target implies potential upside of about 22% above recent levels. PFPT continued to deliver strong execution in 3Q16, with accelerating growth at scale. We believe PFPT remains well-positioned to capitalize on the migration to cloudbased solutions and gain substantial share against legacy vendors. Of particular note, operating leverage again exceeded our expectations and consensus, and we estimate free cash flow (FCF) margin will exceed 20% in FY17, up from 11% in FY16. Management additionally raised its FY17 revenue guidance, which we think is conservative based on recent billings trends. We look for potential upside from conversions of larger McAfee customers, international expansion, and emerging products (e.g., social media). We also expect increasing contribution from the acquisition of FireLayers, which brings advanced threat protection to software-as-a-service (SaaS) applications."

For an analyst ratings summary and ratings history on Proofpoint click here. For more ratings news on Proofpoint click here.

Shares of Proofpoint closed at $69.78 yesterday.

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