Oppenheimer analyst Shaul Eyal was out pounding the table on Palo Alto Networks Inc (NYSE:PANW) Monday, reiterating an Outperform rating and price target of $175, which represents a potential upside of 12% from where the stock is currently trading.
Eyal noted, “We are raising our F3Q15 revenue estimate following a round of late-Q checks (25 VARs in US/EMEA) suggesting PANW’s business is tracking ahead of consensus estimates ($223M/$0.20). We remain positive on the shares for the following reasons: 1) Continued strength across all core products and geographies (US generates ~69% of total revenue); 2) PANW’s platform approach is gaining further momentum; 3) Increasing adoption of Subscription services (avg. subs per customer 2.1 FY14 vs. 1.7 FY13), and growing, in our view; 4) Increased leverage driven by improved productivity and scale. PANW reports 5/27 AMC.”
Bottom line, “We believe PANW’s differentiated products should continue to be the engine of growth in FY15 and beyond. Further, our PT of $175 (11x EV/FY16E rev.) reflects the positive bias toward YoY revenue growth rates north of 35% coupled with gradually expanding operating margins (north of 20%).”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Shaul Eyal has a total average return of 19.6% and a 78.2% success rate. Eyal has a 43.5% average return when recommending PANW, and is ranked #15 out of 3604 analysts.