Getting support from an analyst tends to help stock prices for most companies unless something else is seriously going wrong in a different part of the company. For cybersecurity stock Palo Alto Networks (NASDAQ:PANW), a little love from an analyst started out giving it a slight tick up, but by Friday afternoon, the gains mostly boiled off, leaving Palo Alto hovering between positive and negative.
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Wedbush’s Dan Ives noted that Palo Alto Networks was set for its “…next stage of growth,” thanks to information derived from a set of channel checks on its cloud operations. What Ives found proved encouraging, as Palo Alto offered a strong cloud-based cybersecurity presence at a time when increasing numbers of companies were moving to cloud-based cybersecurity to address their needs. In fact, Ives pointed to “…large deal activity in the federal vertical” to serve as a “shining star” for Palo Alto.
That’s not all, either. Just a couple weeks ago, Palo Alto joined the S&P 500, a move that lit a fire under shares back then. Palo Alto took the slot formerly held by Dish Network (NASDAQ:DISH) during the S&P’s rebalancing, which comes every quarter. With a 52-week high only recently in the rear-view mirror, and Palo Alto shares outperforming the S&P 500 by a factor of better than four to one—Palo Alto is up 55% this year while the S&P 500 itself is up just 11.5%—there’s a lot of reason to like Palo Alto.
All of these factors together combine to make a solid buy. In fact, analyst consensus calls Palo Alto Networks a Strong Buy, supported by 29 Buy ratings and just one Hold. However, Palo Alto Networks stock’s average price target of $244.38 is virtually identical to its trading price today, leaving only a trivial upside potential or downside risk as the price moves today.
