PacCrest: Palo Alto Networks The 'Premier Name' In Network Security, Worth $180/Share

In a report published Thursday, Pacific Crest analyst Rob Owens maintained an Overweight rating on

. The price target was raised from $160 to $180. The company's F3Q results beat expectations. While the momentum at the company continues to be impressive, its subscription ramp is expected to provide upside to the top line. The analyst expects Palo Alto to see $600 million or more in free cash flow during CY17. "We believe PANW is the premier name in network security and a core holding," Owens stated. F3Q was the fourth straight quarter for which the company posted both billings and revenue growth higher than 50 percent, year on year, despite operating margin expansion of 150bps, quarter on quarter. "The company continues to execute well, with strong new-customer acquisition and expansion to larger deployments in its customer base," the Pacific Crest report said. The company also announced the acquisition of CirroSecure, which will help Palo Alto offer a cloud-based product available via subscription based on CirroSecure's technology for securing SaaS application, starting this fall. "The addition of CirroSecure and AutoFocus, announced at the company's analyst day, should add to subscription growth, as well as provide margin leverage attached to recurring revenue," Owens added, while also saying, "Palo Alto remains unique in its disruptive potential, scale, growth and profitability." Subscription offerings continue to be a large part of the company's mix, growing 71 percent year on year in F3Q, driven by the robust adoption of new products, including Traps and WildFire.