Palo Alto Networks stock rises as Baird says Q1 growth was 'impressive' (updated)
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Palo Alto Networks (NASDAQ:PANW) was among the tech sector's standouts on Friday as investment firm Baird called the growth the cybersecurity company generated "impressed," adding that it has "broad-based strength."
Analyst Shrenik Kothari, who has an outperform rating and $220 price target, noted that the company's pipeline for secure access service edge and cloud security continued to show that there is a consolidation theme for clients at play. 
"We believe that the company's platform focus and execution have put it in a good position for long-term growth," Kothari wrote in a note to clients. 
Palo Alto Networks (PANW) shares gained nearly 7% to close at $167.24, though off their best levels of the session following earlier praise.
In addition, Kothari noted that the company's federal business is "one of the clear bright spots," adding that recent checks showed a great mix of federal deal closings occurring this year compared to the past, "demonstrating security momentum."
Palo Alto's (PANW) 27% year-over-year growth in billings was deemed "impressive," especially after coming off a tough comparison. 
Palo Alto Networks (PANW) said it earned an adjusted 83 cents per share on $1.6B in revenue in the first-quarter, topping estimates of 83 cents per share and $1.55B in revenue. 
Looking ahead to its fiscal second-quarter, Palo Alto Networks (PANW) said it expects adjusted earnings per share between 76 and 78 cents per share, with revenue between $1.63B and $1.66B. Billings is forecast to be between $1.94B and $1.99B.
Palo Alto Networks (PANW) expects full-year adjusted earnings per share between $3.37 and $3.44 per share and slightly raised its revenue forecast, as it now sees sales between $6.85B and $6.91B. It previously forecast full-year sales of $6.85B and $6.9B.
Looking ahead, Kothari pointed out that some cybersecurity vendors have started to see greater scrutiny on deals, but the issues are sector specific, with technology, consumer products and retail being more impacted than utilities, oil, defense and those in the public sector.
"All in all, the vendor consolidation trends still strong and security precedence within budget priorities remain key drivers," Kothari explained.
Last week, Loop Capital upgraded Palo Alto Networks (PANW), noting "signs of accelerating momentum driven by an increase in large deal activity."