Proofpoint Remains 'A Consistent Grower With A Strong Track Record Of Execution,' BTIG Says

Proofpoint Inc (NASDAQ: PFPT) posted robust 1Q16 results, with all metrics beating the consensus expectations.

BTIG’s Joel P. Fishbein, Jr. maintains a Buy rating on the company, with a price target of $82.

1Q Beat

Fishbein mentioned that billings were strong, rising 48 percent year-on-year in 1Q16, or 40 percent year-on-year excluding early renewals.

Billings for the quarter came in at $98 million, above the consensus forecast of $92 million. The company also reported revenues of $79 million, higher than the consensus of $76 million.

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Proofpoint raised the midpoints of its FY16 revenue and billings guidance. However, Fishbein believes that the guidance is conservative, since “early signs indicate “significant” pipeline growth from the McAfee and Palo Alto Networks Inc (NYSE: PANW) Partnerships.”

Well Positioned

The analyst pointed out that Proofpoint was among the best positioned security company in an environment of transition to cloud computing.

According to the BITG report, “The company’s strong technology and execution with a limited competitive backdrop and favorable secular tailwinds represent positive drivers moving forward.”

Partnerships

The company’s partner channel accounted for 60 percent of its new and add-on business during 1Q16, from the historical 50 percent.

Management highlighted that there could be potential for upside in the long-term value and pipeline of the McAfee partnership.

“The early stages of the Palo Alto Networks partnership appear to be seeing strong momentum, as Palo Alto’s channel partners have shown strong interest in selling Proofpoint products,” Fishbein added.