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Investing.com - BMO Capital has reiterated an Outperform rating on Palo Alto Networks (NASDAQ:PANW) with a price target of $230.00, representing a potential 15% upside from the current price of $199.90. InvestingPro data shows PANW is considered slightly overvalued compared to its Fair Value, with a "GREAT" overall financial health score of 3.03.
The cybersecurity company reported quarterly results that were generally in line with expectations, delivering approximately one percentage point of upside to total revenues. With $9.22 billion in revenue over the last twelve months and a solid growth rate of 14.87%, PANW continues to strengthen its position as a prominent player in the software industry.
BMO Capital highlighted Palo Alto Networks’ announced intention to acquire Chronosphere, a company that the firm had previously included in its observability market analysis.
While BMO believes Chronosphere is a "very solid company," the firm noted that the potential synergies between Palo Alto Networks and Chronosphere appear less significant than those that might exist between Palo Alto Networks and CyberArk.
Despite this assessment, BMO Capital maintains that Palo Alto Networks will continue to consolidate security spending and currently offers a "reasonably attractive valuation," supporting the firm’s maintained Outperform rating and $230 price target.
In other recent news, Palo Alto Networks reported fiscal first-quarter results that exceeded the high end of its guidance, with revenue reaching $2.47 billion, slightly surpassing the $2.46 billion consensus. The company achieved non-GAAP earnings per share of $0.93, beating the consensus estimate of $0.89. This performance was accompanied by a non-GAAP operating margin of 30.2%, surpassing the expected 29.1%. Palo Alto Networks also announced a $3.4 billion acquisition of Chronosphere, marking its entry into the observability market. In response to these developments, Piper Sandler raised its price target for the company to $230 while maintaining an Overweight rating. Similarly, Cantor Fitzgerald and Citizens reiterated their Overweight and Market Outperform ratings, respectively, each setting a $250 price target. Bernstein also raised its price target to $210, following the firm’s strong earnings. Truist Securities maintained its Buy rating with a $220 price target, noting the momentum in Palo Alto Networks’ Secure Access Service Edge and other offerings.
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