Wells Fargo Says Recent Selloff In Palo Alto Networks Creates A Buying Opportunity - Palo Alto Networks (NASDAQ:PANW)

Shares of Palo Alto Networks Inc PANW have fallen nearly 17 percent over the past six weeks, underperforming the broader Nasdaq Composite index, which lost only 8 percent.

The selloff has created a "compelling" entry point ahead of the company's fourth-quarter report on September 9, Gray Powell of Wells Fargo was quoted as saying in a Barron's report.

Barron's Report

The analyst noted that recent decisions with resellers of Palo Alto's products and services were positive. At the same time, commentary coming from the company's CEO at a recent sales event is encouraging for both near- and long-term growth opportunities.

Barron's expanded that Palo Alto's CEO Mark McLaughlin made "some very positive" remarks; specifically, he set a $2 billion revenue target in the next two years and will be doubling the size of the company by the end of fiscal 2017 organically.

The Street's Take

Meanwhile, the Street is currently projecting Palo Alto to report revenue of $256 million in the fourth quarter 2015 and $426 million in the fourth quarter 2017. As such, the company's own targets are approximately 20 percent above the current Street estimates and imply a 40 percent year growth rate versus the Street's 29 percent projection.

The Bottom Line

Finally, the analysts noted that while it is possible that McLaughlin's comments were "intended as aspirational sales targets" rather than official guidance, the fact that it was made merely three weeks prior to the close of fiscal 2015 serves as an indication that current trends remain "strong."

Shares remain Outperform rated with a valuation range of $183–$199.

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