Wells Fargo initiates Netskope stock with Overweight rating on Zero Trust growth

Investing.com - Wells Fargo initiated coverage on Netskope (NASDAQ:NTSK) with an Overweight rating and a price target of $28.00 on Monday, representing a significant premium to the current trading price of $21.75.

The firm cited Netskope’s ability to deliver strong annual recurring revenue (ARR) growth at scale while expanding profitability margins amid the market transition toward Zero Trust security architecture. The company, currently valued at $8.31 billion, maintains a healthy gross margin of 68.86%, though InvestingPro data shows it remains unprofitable over the last twelve months.

Wells Fargo outlined four key elements supporting its investment thesis, beginning with Netskope’s architectural advantages that increase the durability of ARR growth.

The firm also highlighted the market evolution toward Zero Trust as a driver for sustainable ARR growth, along with expectations for gross margin expansion.

Wells Fargo projected that Netskope’s operating margin should reach break-even in fiscal year 2028, supporting the positive outlook for the cybersecurity company.

In other recent news, Netskope has garnered attention from several financial analysts with positive ratings. BTIG initiated coverage with a Buy rating and a $27.00 price target, highlighting Netskope as a leading vendor in the rapidly growing Secure Access Service Edge (SASE) market. Similarly, TD Cowen also started coverage with a Buy rating and a $30.00 price target, recognizing the company’s potential to disrupt a significant market opportunity while maintaining substantial revenue growth. Mizuho has given Netskope an Outperform rating, citing its scalable and robust SASE platform that sets it apart in the security field. Deutsche Bank also initiated coverage with a Buy rating and a $25.00 price target, noting Netskope’s leadership in network security for the cloud and AI era. BMO Capital joined with an Outperform rating and a $26.00 price target, expressing optimism about the security sector and the role of artificial intelligence as a growth driver. These recent developments reflect a strong consensus among analysts on Netskope’s promising position in the market.

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