A number of analysts raised their price targets for Palo Alto Networks (PANW) after it announced strong fiscal fourth quarter 2014 results and provided an encouraging sales guidance for fiscal first quarter 2015.
Palo Alto Networks reported fourth quarter revenues of $178.2 million, a 59% increase from the year-ago quarter. Revenues beat the consensus estimate of $161.3 million by a wide margin.
Excluding one-time items such as share-based compensation (SBC), intangibles amortization and litigation charges, reported earnings came to 11 cents. Results including SBC were however short of the Zacks Consensus Estimate.
For the upcoming quarter, management expects revenues to grow 39-42% year over year to $178-$182 million (the Zacks Consensus Estimate is at $181 million). Earnings excluding SBC are expected to come in at 12 cents, better that our estimated loss of 8 cents.
The results and guidance had analysts raising their price targets –
|
ANALYST |
PRICE TARGET (OLD) |
PRICE TARGET (NEW) |
PRICE TARGET CHANGE (%) |
RATING (AFTER THE REPORT) |
|
FBR Capital Markets |
$ 90 |
$105 |
+16.67% |
Outperform |
|
JMP Securities |
$90 |
$120 |
+33.33% |
Outperform |
|
Credit Suisse |
$87.50 |
$110 |
+25.71% |
Outperform |
|
Bank of America analyst Tal Liani |
$85 |
$97 |
+14.11% |
Neutral |
|
Morgan Stanley |
$105 |
$115 |
+9.52% |
Overweight |
|
Robert W. Baird |
$100 |
$110 |
+10% |
Outperform |
|
Piper Jaffray |
$100 |
$110 |
+10% |
|
|
Cowen and Company |
$80 |
$85 |
+6.25% |
|
Most of the optimism stems from the company’s product lineup, which includes its next-gen firewall security appliances. Increasing uptake of its subscription services like Wildfire is also a factor.
Palo Altois also seeing more customer wins and increasing spending at existing ones. Customers at the end of the quarter ending Jul 31 were 19,000, which is an increase of 40.1% from a year ago. According to the company, its high-end customers include 75 Fortune 100 companies and 850 of the Global 2000.
In the last reported quarter, Palo Alto Networks replaced its competitor Juniper Networks (JNPR) as the agency wide security provider for a Canadian government agency. It also became the agency wide security provider for a large U.S. retailer, replacing Cisco (CSCO).
Palo Alto Networks, Inc. offers a network security platform that enables firms, service providers and government bodies to secure their networks.
Palo Alto Networks currently has a Zacks Rank #5 (Strong Sell). A better-ranked stock in this industry is SeaChange International Inc. (SEAC), which sports a Zacks Rank #1 (Strong Buy).
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