Morgan Stanley Sees Palo Alto Networks (PANW) Sustaining 20%+ Topline Growth Beyond Appliance Refresh Cycle

Morgan Stanley analyst Hamza Fodderwala reiterated an Overweight rating and $823.00 price target on Palo Alto Networks (NASDAQ: PANW) on the belief that the company can sustain 20%+ topline growth beyond the current appliance refresh cycle.

The analyst stated "despite our recent VAR survey and a large backlog (due to supply constraints) suggesting higher product growth sustains for longer, our model conservatively forecasts slower product growth from 16% YoY in FY22 to 5% YoY in FY23. We arrive at 20%+ total revenue/billings growth over the next 3 years, based on 1) a higher mix of faster growing cloud-based NGS (Next Gen Security) sales reaching nearly 40% of total billings in FY23 (vs. ~33% in FY22) and 2) recurring subscription & support revenue streams attached to the appliance, which have high renewal rates and appliance attach rates that can sustain durable double digit growth in the core network security business."

For an analyst ratings summary and ratings history on Palo Alto Networks click here. For more ratings news on Palo Alto Networks click here.

Shares of Palo Alto Networks closed at $560.94 yesterday.

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