Yet another serendipitous COVID-19-related success story in the stock market is cybersecurity company Palo Alto Networks Inc. (PANW). Palo Alto has seen its Q2 revenues rise due to the work-from-home shift occurring during FY2020.

Even as parts of the global workforce return to offices, the need for robust cybersecurity software is not expected to subside.

Detailing this success is five-star analyst Ittai Kidron of Oppenheimer, who remains bullish and maintains his rating on the stock as Buy, keeping his 12-month price target at $420. This reflects a 15.88% upside potential on Palo Alto Networks' Friday closing price of $362.45.

On TipRanks, PANW earns a Strong Buy consensus rating based on 19 Buy, 1 Hold, and 1 Sell ratings. At $434.95, the average analyst price target suggests 20% upside potential. (See Palo Alto Networks analysis on TipRanks)

Kidron wrote that Palo Alto beat even the most optimistic estimates following its Q2 earnings report. The analyst was “impressed with the company's continued transition to a software and subscription model with strong growth” seen in its Prisma Cloud and Cortex security platforms.

He also noted that Palo Alto’s fast-growing SaaS business is accelerating billings year-over-year and that the company’s strong execution in transition to cloud based software is “encouraging.” Given the current momentum, he thinks more upside is expected ahead.

Palo Alto Networks is hailed by Kidron as a global leader in the next-generation security solutions market. He believes that with spending on security passing expectations, revenue will continue to grow along with the increased customer base.

Additionally, Daniel Ives of Wedbush Securities argues that cybersecurity is in high demand due in part to recent major cyber breaches. "We believe the recent SolarWinds and Colonial hack is adding to incremental deal flow and pipeline opportunities in the field and translating to the white hot growth that cyber security players are seeing across the board with bellwethers like Palo Alto front and center," the analyst commented.

Story continues

So, what's the bottom line? Ives stated, "It appears Palo Alto is finally starting to get back its sea legs back and accelerate growth in the field with its cloud Prisma strategy now really starting to catalyze the overall growth story into the next 12 to 18 months. We believe this is a cloud cyber security re-rating story in motion and view Palo Alto's stock as having a strong upward trajectory over the next year as the Street starts to fully appreciate the cloud transformation playing out."

Also rating the stock a Buy, Ives is even more optimistic than Kidron about PANW's growth prospects given his $450 price target (24% upside potential).

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.