Solar energy firm First Solar, Inc. (NASDAQ:FSLR) and Cyber security company Palo Alto Networks Inc. (NYSE:PANW) held investor conferences this week to announce certain strategies and technologies. Oppenheimer analysts attended these conferences and reported on their findings. Let’s take a closer look.


First Solar, Inc.

First Solar’s Analyst Day turned out to be quite a disappointment for investors, says Oppenheimer analyst Colin Rusch. However, the analyst remains confident in the company’s strategy. Rusch reiterates an Outperform rating and retains a price target of $76.

FSLR didn’t commit to a capacity expansion which was the disappointing part at analyst day, but the company did share an upside to the story. The analyst states, “FSLR highlighted its expectation for 23% operating margins on incremental revenue driven by new capacity. We continue to believe this is the heart of the growth story and a reasonable estimate for the company.”

The analyst was also satisfied with the company’s pace of technological development. He adds, “We were impressed with the product roadmap, notably at its larger form factor module and the introduction of its Medium Voltage DC (MVDC) architecture, which we believe has the potential to reduce its balance of system expense by 30%+ and will integrate with energy storage easily.” In addition, the analyst adds his own suggestion, stating, “We believe simplifying install will aid its entrance into additional emerging markets and that storage could prove an important differentiated and growth driver.”

FSLR also presented a comprehensive analysis of demand for its products. Rusch comments, “We continue to see robust global demand and believe FSLR is being potentially over-conservative with its capacity expansion.” The analyst finalizes with his adjusted estimates for the company, stating, “We now expect 1H:16 EPS roughly in line with 2H:16 EPS and will adjust 2017 estimates when we have a better feel for mix and close rates through the balance of the year.”

According to TipRanks, Colin Rusch currently has a 53% success rate, delivering an average return per recommendation of 12.7%. Among Rusch, four other analysts gave FSLR a Buy rating, and seven other analysts remained Neutral. All recommendations end up at a 12-month average price target of $76.56, marking a 21.99% upside from current levels.

Palo Alto Networks Inc.

At Ignite 2016, the company’s cyber-security event, Palo Alto dedicated a day to investors in what was called ‘Investor Track’. According to Oppenheimer analyst, Shaul Eyal, the company appears to retain leadership in its field. Eyal remains bullish on the stock, reiterating an Outperform rating with a price target of $177.00.

The analyst stresses three important takeaways he believes shed a bright light on the company’s future, starting with its market strategy. The company is facing a huge market opportunity, says the analyst, citing a Total Addressable Market (TAM) of $18.2B in 2016E which he expects will grow to $22.1B in 2019E. Eyal believes Palo Alto improved its approach with a new Prevention Vs. Detection product & marketing method, in which the company upgrades its prevention of cyber attacks. The analyst comments, “We view this as complementary to PANW’s land, expand, and retain business model.”

In addition, the company continues to enjoy subscription growth which widely contributes to revenue. The analyst explains, “With eight subscription products and ~90% renewal rates, we believe its business model is transitioning into a highly predictable one.” He continues, “There is the potential for Wildfire (33% penetration rate) and Traps (endpoint, 1% penetration rate) to continue and increase subscription revenues.” On a similar note, the analyst adds, “[PANW] continues to focus on balancing operating cost discipline and growth.”

Lastly, the analyst points to the company’s guidance for which he decides to raise his FY17 EPS estimates from $2.52E to $2.71E. The analyst states, “PANW reaffirmed FY16 guidance (18-19% op., 40% FCF margins) and provided growth directions for ‘FY17 and beyond.’” He continues, “In a high-growth outcome, the top line would increase >30%, FCF between 35% and 45% (includes plans for new HQ), and op margins would improve 100-200bps.”

According to TipRanks, 61% of Eyal’s predictions are profitable, delivering an average return per recommendation of 10.4%. Among Eyal, in the past three months, 23 other analysts gave the company a Buy rating, and one analyst remained on the sidelines. All price targets amount to an average 12-month PT of $191.54, marking a 21.06% upside from current levels.