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Investing.com -- Piper Sandler raised its rating on Palo Alto Networks (NASDAQ:PANW) to “overweight” from “neutral” on expectations the cybersecurity company’s growth will strengthen and cash flow will improve. The price target was lifted to $225.
The brokerage said the company’s push to sell more integrated security products is driving a rebound in bookings, with growth expected to accelerate into late 2025. It also expects revenue to gradually catch up with that pace.
Cash flow margins, which have been flat in recent years due to changes in payment terms and financing arrangements, are seen improving as more customers move to annual payments.
Piper also pointed to the planned purchase of CYBR, saying it will add a strong product and fill a gap in Palo Alto’s portfolio, potentially boosting market share over time.
It forecasts the company can sustain annual growth in the low teens through 2029 while expanding cash flow margins.
Risks include weaker economic conditions, competitive pressure and security breaches.
“Underpinning our $225 PT is a low-teens CAGR through CY’29, helped by the firewall cycle in the near-term and leadership in security consolidation over the mid-term, powered by XSIAM traction,” said analysts at Piper Sandler.