KeyBanc Capital Markets maintained its overweight rating on the stock and raised its target price from $380 to $400. After that, shares of Palo Alto, which is listed on the Buenos Aires market through its Cedear, reached $370.
Analysts led by Eric Heath said they reiterated their Overweight rating following a strong, but in line with expectations, fourth fiscal quarter and fiscal 2025 guidance consistent with their forecasts. Fiscal fourth quarter revenue beat estimates by 1%, billings by 2%, remaining performance obligation (RPO) was met and margins exceeded expectations.
Company management has changed its guidance to an RPO basis and expects 19% to 20% growth for both fiscal Q1 2025 and fiscal 2025, both slightly below consensus but in line with investor expectations, according to analysts.
The company also provided one-time revenue guidance of 12% for fiscal 2025, slightly above consensus of 11%, and noted that it assumes a similar mix of flexible revenue programs as fiscal 2024, the analysts added.
As for the CrowdStrike outage, Palo management did not indicate it would impact fiscal fourth-quarter bookings but does expect it to boost its Cortex XDR momentum.
Palo Alto: What the market is looking at
Heath and his team said they remain positive about Palo’s leadership in several strategic markets and its prominent position as a consolidator of security spending. They noted that the target price was raised to $400 due to slightly higher estimates.
RBC Capital Markets maintained its Outperform rating on Palo Alto and raised its price target from $390 to $410.
“We believe the quarter represented a strong finish to the fiscal year, with increasing momentum heading into fiscal 2025,” said a team of analysts led by Matthew Hedberg.
Analysts said they were pleased to hear about accelerating trends in the second half of fiscal 2024, the progress on the platform and the guidance moving from billings to RPO, something they wanted to see and which should better align with underlying trends, primarily the moving parts around the platform.
Hedberg and his team added that initial guidance for fiscal 2025 was slightly ahead and should set a positive tone as they believe there could be further upside potential. JMP maintained its Market Outperform rating and a $380 price target on Palo Alto.
Strategists added that it was a strong finish to fiscal 2024, with President and CEO Nikesh Arora stating, “I know there was significant consternation around our platform strategy six months ago. All I want to say is that I wish we had started down that path sooner.”
Palo Alto (PANW) has a Hold rating on Seeking Alpha’s quantitative system, which consistently outperforms the market. Meanwhile, the average rating from Seeking Alpha authors is also Hold, but the average rating from Wall Street analysts is more positive with a Buy recommendation.
Source: Ambito
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