UBS: Palo Alto Networks 'Like Clockwork'

In a report published Thursday, UBS analyst Brent Thill maintained a Buy rating on

, while raising the price target from $162 to $180, after the company reported impressive results. Palo Alto reported its F3Q product revenues and billings ahead of consensus. The outperformance in revenues, operating margins and EPS was driven by the company's balanced product and services mix and broad based strength across geographies. The company guided to F4Q revenues of $252-256M (+41-44 percent y/y). Palo Alto's strong pipeline and the untapped potential in its key distribution relationships are expected to help the company expand its market share from the present 8 percent. The company's expanded portfolio within an underpenetrated installed base is also a positive feature. Palo Alto's stock has performed very well in recent months. "Shares have had some of the best returns in our coverage 2 years running (+31% YTD, +113% CY14) where ongoing outperformance of this magnitude will likely be constrained in our view, in spite some of the best fundamentals in software. Yet, with a high-growth, high visibility, and highly profitable model, positive sentiment should persist, where FCF metrics should support valuation at current levels," analyst Brent Thill mentioned. The diluted EPS estimates for FY15, FY16 and FY17 have been raised from $0.79 to $0.84, from $1.53 to $1.64 and from $2.45 to $2.57, respectively.