Previewing Palo Alto Networks Inc’s (NYSE:PANW) upcoming fiscal fourth-quarter, Pacific Crest analyst Rob Owens has confidence for the cyber security firm, highlighting a few items to watch.

First, Owens finds the firm’s modest guidance last quarter to be in PANW’s favor for fourth-quarter results, coupled with notable potential product revenue upside thanks to a strong market demand. Second, the analyst points to add-on subscriptions as a driving factor for billings, amplifying growth by over 40%.

When considering expanding margins, partnerships that place PANW at a competitively winning advantage, and a “possible wild card” if the firm decides to transition to providing annual guidance, the analyst sees PANW in a stellar position. Even considering the growth the firm has already reached, Owens sees a bounty of opportunity lying ahead considering Palo Alto has only captured less than 10% of a security market that keeps growing.

Owens asserts, “Our checks were unilaterally positive for Palo Alto Networks’ July-end quarter, with particular strength in the federal market and continued success with subscription add-ons. Given a conservative product revenue expectation and multiple levers for upside, we would be buyers of shares.”

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“We maintain our view that PANW is the premier name in security, with substantial opportunity for revenue growth, FCF generation, and margin expansion as it builds a platform of products and an ecosystem of best-of-breed players,” he concludes.

Recognizing a great amount of opportunity for PANW shares in an expanding security market, Owens reiterates an Overweight rating on PANW with a price target of $190, which represents a 36% increase from where the stock is currently trading.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Rob Owens is ranked #187 out of 4,127 analysts. Owens has a 65% success rate and yields 18.3% in his annual returns. When recommending PANW, Owens earns 51.7% in average profits on the stock.

TipRanks analytics demonstrate PANW as a Strong Buy. Based on 20 analysts polled in the last 3 months, 16 rate a Buy on PANW, while 4 maintain a Hold. The 12-month average price target stands at $182.50, marking just under a 31% upside from where the shares last closed.