Stifel Reiterates Buy on Palo Alto Networks (PANW) Following 4Q Report
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Stifel reiterated a Buy rating and $210.00 price target on Palo Alto Networks (NYSE: PANW) following the company's 4Q earnings report. Total revenue increased 41.2% y/y to $400.8mn, exceeding the Street's estimate of ~$390.0mn. Non-GAAP EPS of $0.50 was in-line with estimates. Palo Alto expects 1Q17 total revenue of $396.0-402.0mn and non-GAAP EPS of $0.51-0.53 versus previous Street expectations of $401.8mn and $0.56, respectively.
Analyst Gur Talpaz commented, "Following the market close on Tuesday, August 30, Palo Alto Networks reported F4Q16 results that featured beats on both lines of revenue in addition to a substantial billings outperformance. Management accredited this period's performance to a combination of factors, including the ongoing shift away from standalone point solutions to tangible platforms like Palo Alto's that increasingly automate security functions within the enterprise through the company's natively integrated suite of solutions. The degree of traction that the company is experiencing with its platform is best communicated through its revenue per customer, which at $40.5K is roughly 5.5x the simple average of the company's primary competitors: CHKP, CSCO, and FTNT. Additionally, the company's push to a more SaaS-oriented financial model persisted during the quarter, as the percentage of total billings comprised by recurring subscriptions increased over 500bps from 59.3% in FY15 to 64.8% in FY16 while the number of attached subscriptions per device increased from 2.3 in F2Q16 to 2.6 in F4Q16. We reiterate our Buy rating."
Shares of Palo Alto Networks closed at $143.45 yesterday.
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