Palo Alto Networks Analyst Round-Up

Palo Alto Networks PANW shares were up over eight percent as analysts turn bullish revolving around the case between Juniper and Palo Alto.

Palo Alto is expected to pay $175 million to settle the suit, while both have agreed to a) dismiss all litigation against each other; b) not sue each other for patent infringement for eight years; and c) license the patents at issue in all outstanding suits for the life of the patents.
• Needham reiterates the Buy rating and raises the price target to $95 from $87 Thursday morning. Noting the strength in high-end product, the analyst see Palo Alto evolving as a platform for “next generation” security. The settlement with Juniper is viewed as adding $0.07 to FY15 EPS as analysts raised estimates from $0.53 to $0.60.
• JMP has reiterated its Market Outperform rating, while raising their price target to $90 from $80 citing the favorable sentiment. Recent strength in high-end data center appliance sales has JMP analysts commenting they believe the data “represents an attractive long-term growth opportunity.”
• RW Baird analysts maintain the Outperform rating and reiterated a price target of $90. “Management noted strength in the APT market with its WildFire module growing 35 percent in FQ3 which is up from 30 in FQ2.”
• Nomura reiterated a Buy rating, while increasing its price target to $90 from $80, also on the expected future benefits to be experienced now that Palo Alto has its settlement taken care of. Focus on “billings growth” analysts commented the growth is 47 percent YoY versus 50 percent YOY back in January Q1 2014.
• Pacific Crest stated in its note Thursday morning a reiterating of its Outperform rating along with a $90 price target. Addressing Palo Alto’s unique and distributive story line, analysts “…expect 30% or greater revenue growth in 2015 and a significant ramp in profitability on the way.” The $84.1 million in revenue exceed Pacific Crests estimate of $79.5 million, which marks a 38 percent YOY growth rate.
• Raymond James has increased its rating to a Strong Buy, which reverses its downgrade on the expected litigation risk tied to Juniper. The analysts also increased its price target to $90 from $84. On top of a strong F3Q overall financial statement, analysts note “reaccelerating product and revenue growth and beating on EPS and billings”.
The stock is currently up 6.7 percent at $74.19.