FBR Capital Raises Price Target on Palo Alto Networks (PANW) Following 3c EPS Beat
FBR Capital reiterates an Outperform rating on Palo Alto Networks (NYSE: PANW), and raised the price target to $200.00 (from $175.00), following the company's 4Q15 earnings results. Total revenue of $283.9 million beat the Street's estimate of $256.4 million. Pro forma EPS came in at $0.28, above the Street’s $0.25 estimate. Billings came in at $393.6 million, versus Street estimates of $338.0 million.
Analyst Daniel Ives commented, "Last night, Palo Alto Networks reported another rock-solid quarter with F4Q15 (July) results coming in ahead of expectations on the top line, bottom line, and billings, while delivering an F1Q16 (October) outlook that also came in above the Street. The company's product cycle and massive cybersecurity secular tailwinds are catalyzing accelerating growth in the field and deal flow, in our view, as enterprises and governments need next-generation security protection given the lack of sufficient defense capabilities in legacy systems. As evidenced this quarter, Palo Alto stands to benefit further through the addition of new customers as well as capitalizing on its underpenetrated installed base as these customers continue to move upstream in their purchases with healthy cybersecurity spending, a strong subscription business, and a broader product footprint adding tailwinds. We believe last night's Cespedeslike performance and healthy outlook should give the Street further confidence this morning around Palo Alto's golden market opportunity for the coming 12 to 18 months as the company is firing on all cylinders heading into FY16. While we are maintaining our Outperform rating, we are raising our price target from $175 to $200 (45x FY16 EV/FCF multiple) to reflect our increased estimates."
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Shares of Palo Alto Networks closed at $165.17 yesterday.