Palo Alto Networks: Strong Growth Prospects and Attractive Valuation Support Buy Rating

Palo Alto Networks (PANW – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Keith Bachman from BMO Capital maintained a Buy rating on the stock and has a $217.00 price target.

Keith Bachman has given his Buy rating due to a combination of factors influencing Palo Alto Networks’ performance and prospects. The company reported results that were largely in line with expectations, despite some challenges at the end of the April quarter. Notably, the net new NGS ARR exceeded expectations, driven by widespread demand, which bolsters confidence in its sustainability. Additionally, the management’s decision to raise the lower end of its FY25 revenue and adjusted FCF margin guidance reflects a positive outlook.
Bachman also notes that while there were some concerns about buying behavior due to macroeconomic factors, these have normalized. Palo Alto Networks continues to show strong momentum across its NGS portfolio, with significant growth in its XSIAM and SASE offerings. The company’s ability to attract new customers and transition existing ones to its newer platforms is seen as a positive indicator. Furthermore, the potential for AI-driven growth through offerings like Prisma AIRS is viewed as a promising avenue for future revenue expansion. Overall, the company’s valuation is considered attractive relative to its growth potential, supporting the Buy rating.

In another report released today, Goldman Sachs also maintained a Buy rating on the stock with a $231.00 price target.