Palo Alto Networks rises as Wedbush says checks show cloud set for more growth
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Palo Alto Networks (NASDAQ:PANW) shares rose more than 1% in pre-market trading on Friday as investment firm Wedbush Securities said recent channel checks showed the company's cloud platform is set for the "next stage of growth."
Analyst Dan Ives, who has an outperform rating on Palo Alto Networks (PANW) shares, noted the Nikesh Arora-led company is seeing "considerable strength with major expansion" in its installed base as more companies move their cybersecurity defenses to the cloud.
"Some large deal activity in the federal vertical could be a shining star yet again the next few quarters for the company as we believe PANW is very well positioned within the Beltway as a major cloud transformation takes place in the 202 area code with cyber security front and center as a concern," Ives, who boosted his per-share price target to $290 from $225, wrote in an investor note. 
Ives added that Palo Alto's (PANW) push into the cloud has allowed it to capture a more "complex" enterprise installed base and the deals are still being signed, despite concerns about the global economy. 
In addition, Ives said that while only 46% of workloads are in the cloud at present, that number is expected to hit 70% by 2025, opening up a $200B growth opportunity for cloud security, which should benefit Palo Alto Networks (PANW) and several other cybersecurity companies. 
"Taking a step back, the cloud transformation at PANW is well underway and the company is becoming the dominant player of cyber security as larger more strategic deals are getting inked," Ives explained.
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