BTIG upgrades Palo Alto Networks as platform adoption boost outlook

Investing.com -- BTIG upgraded Palo Alto Networks to Buy given stronger demand and the idea that cybersecurity firm’s ability to deliver double-digit revenue growth over the next several years.

The brokerage raised its price target to $248 per share saying there is better customer uptake of Palo Alto’s platform, including products such as Prisma SASE and its security automation tool XSIAM.

BTIG said feedback from seven industry contacts representing about $1.2 billion in annual Palo Alto sales was "surprisingly positive" compared with prior quarters, giving it more confidence in the company’s targets of 14% total revenue growth and 26% growth in annual recurring revenue from next-generation security (NGS) in fiscal 2026.

The firm projects NGS products will make up more than 65% of Palo Alto’s revenue mix in fiscal 2027, supporting annual growth of 12% or more.

Analysts had been skeptical that Palo Alto could meet its fiscal 2026 guidance for recurring revenue, which implied a sharp ramp-up, but BTIG said improving market conditions and stronger sales execution now make the target achievable.

The brokerage said Palo Alto’s pending acquisition of identity-security firm CyberArk could help the company expand into new areas and maintain growth of more than 20% in identity protection.

BTIG valued the stock at 35 times estimated free cash flow for calendar 2027, above Palo Alto’s historical range, arguing that its shift toward cloud-based and recurring revenue streams warrants a premium.

Shares of Palo Alto Networks are up 2% at $213 in premarket trading on Monday

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